Russia is attacking Ukraine. In this context, some countries have imposed sanctions on Russia. Russia’s central bank and other Russian banks are expected to be the last resort if it does not listen to Russia. Swift wanted to stop making payments for this.
Sanctions Imposed by Western Countries
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Swift serves as a mechanism for making international payments. However, discontinuation of this Swift policy would cause serious damage to payments companies and financial institutions. However, this loss can happen quickly or have an impact on long-term financial contracts.
The U.S. has been pressuring Swift to suspend payments in 2018 to harass banks in Iran. But, it is a very small economy. American policy was criticized by many European governments at the time.
Germany is a bit more sensitive, as two-thirds of its energy supplies depend on Russia. Already, Germany has decided to halt the process of certifying the Nord Stream 2 pipeline that supplies gas from Russia to Germany.
However, officials in the United States, Europe and the United Kingdom have decided to look into the impact of such actions on banks that allow transactions or allow payments for fuel and food.
However, the details of how they will be implemented have not been disclosed.
What is The Impact on Russia?
If these sanctions or policies are implemented it will seriously embarrass Russia. However, after the formation of Crimea in 2014, Russia adopted an alternative system called the System for Transfer of Financial Messages (SPFS).
China also has a system called Cross Border Interbank Payment System (CIPS) for payments.
Many thought that by officially sidelining Russia it would bring that country closer to China. Experts believe that this is an opportunity for Chinese leaders looking to reduce the importance of dollar-based payments in place around the world and further boost this trend.
However, a banking spokesman told that China had no plans to help Russia. China has more export-import trade relations with various countries than Russia
Isolating Russia’s central bank would be a bigger blow to Russia than stopping Swift payments. If Russia does not use the $ 630 billion central bank currency to promote the ruble, its value will plummet. This is likely to have a serious impact on the Russian economy.
The UK has made it clear that it will no longer adopt a soft stance on Russia’s economic interests in the UK.
Recently, the UK government did not approve the application on the grounds that it had not fully explored other alternatives to build an electricity pipeline in the north of the UK. Some people associated with the project told that the project involved both Ukraine and Russia and that the situation in Ukraine was changing day by day.
Her Majesty the Revenue and Customs (HMRC) has been given extensive powers to confiscate the assets of persons who cannot give an explanation for their income.
Roman Abramovic’s decision to transfer Chelsea FC leadership to a charity is seen as not only legal but also a signal.
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