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Russia needs to prepare for ‘unlikely scenario’ of blocked access to SWIFT — minister

September 19, 2014, 10:56 UTC+3 SOCHI
The European Parliament earlier recommended excluding Russia from the SWIFT system
1 pages in this article
Russian Economic Development Minister Alexei Ulyukayev

Russian Economic Development Minister Alexei Ulyukayev

© ITAR-TASS/Alexai Nkolsky

SOCHI, September 19. /ITAR-TASS/. Moscow should be ready for a possible decision to block Russian access to the SWIFT international banking transaction system, though this scenario is unlikely, Russian Economic Development Minister Alexei Ulyukayev said on Friday.

“I believe that the European Union will not do the bidding as this is nonsense,” Ulyukayev said, stressing that Russia will make every effort to protect its banking system.

“I think that in fact this will not happen, but we, of course, should be ready for even this unlikely scenario,” the Russian minister told journalists on the sidelines of the Sochi Investment Forum.

European Parliament hostile resolution

The European Parliament discussed at its plenary session on Thursday the Ukraine crisis and the relations between the European Union and Russia.

The resolution, adopted at the session, ran that the European Union should consider excluding Russia from the SWIFT system and cancelling agreements with Moscow in the energy sector, including the South Stream pipeline project.

What is SWIFT and what can blockng lead to?

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 1.8 billion communications a year, remitting payment orders worth $6 trillion a day. The system comprises over 10,000 financial organizations from 210 countries.

Under the SWIFT charter, groups of members and users are set up in each country covered by the system. In Russia, these groups are united in the RosSWIFT association.

Russia's former finance minister Alexei Kudrin said on Tuesday that blocking Russia's access to the SWIFT might cause Russia’s GDP to shrink by 5%

“If the SWIFT system is cut off after all, this factor alone may cause a GDP contraction by up to 5% during the year since the restriction is imposed,” Kudrin said.

 

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