EU does not intend to change the sanctions regime against Russia amid Moscow's demands for SWIFT - Euractiv
Kyiv • UNN
SWIFT will not be able to connect Russian banks until the EU changes sanctions legislation.
The Trump administration will need Europe's consent to lift any sanctions on Russia in order for the recently agreed ceasefire agreement in the Black Sea to work, but this could prove difficult. SWIFT will not be able to connect Russian banks to the network, as Moscow demands, unless the EU changes its sanctions legislation, and the bloc says it has no intention of changing anything, Euractiv reports, UNN writes.
Details
Under the Black Sea ceasefire agreement agreed by US President Donald Trump's administration this week, Russia and Ukraine have agreed to a truce, although Moscow has said its participation will depend on a number of preconditions, including easing sanctions.
According to a Kremlin report, the agreement was to include the lifting of some Western sanctions, in particular for banks and other services involved in the export of agricultural products, including fertilizer supplies.
Although the Trump administration appears to agree to this, according to the Wall Street Journal, Kiev has stated that it has not agreed to any easing of measures against Moscow.
The exclusion of Russian banks from the international payment system SWIFT was one of the first measures taken by EU member states shortly after Russia's invasion of Ukraine.
Currently, eight Russian banks are affected, with the exception of Gazprombank, which was removed from the list to allow EU countries to pay for supplies of Russian gas and oil. In fact, the latter is under restrictions due to US sanctions.
The Kremlin said its commitment to the Black Sea ceasefire agreement would depend on reconnecting the Russian Agricultural Bank and several other banks to the SWIFT system.
The Russian Agricultural Bank plays a key role in financing food production and exports, but has been blacklisted for its operations in support of Moscow's war machine.
However, as the publication notes, Russia's request is partly misleading. When the EU imposed economic sanctions on Russia after February 2022, food products were explicitly excluded. In other words, Russia has access to the global market when it comes to grain and fertilizers, and it has been trading these goods ever since.
The main reason for Moscow's messages was to "score points with the Global South by stating that Russia wants stable or low food prices, as Russian agriculture is not under sanctions," said Alexander Kolyandr, a researcher at the Center for European Policy Analysis (CEPA).
While the Trump administration may want to lift sanctions against Russia to secure a deal, progress depends on EU approval - and it is unlikely to happen quickly
Russia's haggling over the Black Sea Initiative is seen as Moscow's desire to probe whether it can begin to undermine the EU sanctions regime, the publication notes.
Kiev and its European allies fear that any concessions - even seemingly minor ones - could lead to the lifting of the West's sanctions framework against Russia since the start of the war in Ukraine. Moscow may also try to divide the US and Europe on the issue of proper sanctions policy.
Since SWIFT is based in Belgium, it must comply with EU rules and sanctions legislation. Therefore, "at some point we [Europeans] will have to connect," one EU diplomat told Euractiv.
"SWIFT will not be able to connect Russian banks to the network unless the EU changes its sanctions legislation," said Janis Kluge, a senior fellow at the German Institute for International and Political Studies.
SWIFT did not respond to Euractiv's request for comment.
The EU's economic measures against Russia, which must be extended every six months by a unanimous decision of all 27 member states, are subject to extension until July 31.
Lifting sanctions against Russia before a full ceasefire and the withdrawal of troops by Moscow from Ukraine remains impossible, EU diplomats say.
"Still analyzing what this means or could mean. But so far this is a statement in which we did not participate," a second EU diplomat told Euractiv.
Nothing will change before the extension of sanctions [in July], and we will work to ensure that nothing changes, because Russia itself has not changed, nor have its goals
Most EU member states are concerned that Hungary, which was one of the first EU countries to react to the Black Sea agreement, has called for the lifting of sanctions against Russia and has repeatedly used its agreement on the extension as a political trump card.
"Theoretically, an EU country could threaten not to extend sanctions if the SWIFT ban for Russian banks is not excluded from sanctions legislation," Kluge said.
The European Commission did not comment on whether US officials had been in contact on the issue.
There is also a workaround option for the US, at least in theory.
Analysts say Washington could reopen correspondent accounts in the US for Russian banks under US jurisdiction.
"This means that I can trade in dollars, conduct transactions in dollars, and do whatever I want with US dollars," Kolyandr said. - [This is] possible without SWIFT. It would be extremely burdensome, tedious and slow, but it is possible."
However, Washington cannot force SWIFT to reconnect the Russians, both analysts said.
"Trump could also potentially try to put pressure on SWIFT, which would make their lives very difficult, but it cannot contradict EU rules," Kluge said.
Asked what reaction Washington should expect if it tried to pressure the EU to quickly lift measures on Russia, a third diplomat quipped: "I cannot foresee this happening - at least, if using reasonable justification."
