Sberbank was not affected by the EU's original sanctions rollout against Russia's banks. Now it seems the EU is changing its mind.
Previously spared by the EU from harsher sanctions because of its role in channeling payments for Russian gas and oil, Sberbank is facing expulsion from the Swift system as the EU also seeks an embargo on crude oil from Russia, «Reuters» (behind paywall) reported.
On Wednesday, the executive commission of the EU proposed to cut Sberbank, the Credit Bank of Moscow, and the Russian Agricultural Bank from the Society for Worldwide Interbank Financial Telecommunications (Swift). Removing the banks from the system makes it much more difficult for a bank to receive payments.
Sberbank and the other two banks would join seven other banks that the EU said it would bar from Swift in March. The current measures are part of the sixth round of sanctions packages, which include an embargo on crude oil, in six months.
Other Willing Buyers
Still, the measures would not completely halt Russia's exports of crude oil. According to a «New York Times» (behind paywall) report from Wednesday, India is a willing buyer of the country's oil. Since the start of the Ukraine war, India’s purchases of Russian crude have risen dramatically. In December and January, the country had not imported any oil from Russia, rising to about 300,000 barrels a day in March and more than doubling to 700,000 a day in April, according to the report. India remains neutral in the conflict.
Switzerland, while also neutral, has adopted a wide array of sanctions introduced by the EU.
Similarly, China has been discreetly buying oil from Russia, according to a report Tuesday in the «Financial Times» (behind paywall). The report went on to say that starting May 15, commodity traders in the EU and Switzerland will be prohibited from selling Rosneft barrels anywhere else in the world.
Alternatives to Swift
To be sure, there are alternatives to the Swift system, one of which was developed by Russia's central bank - the System for Transfer of Financial Messages (SPFS). Last year, the bank said SPFS could handle domestic interbank correspondence. Yet it lacks international connectivity and unlike Swift which operates 24/7, SPFS only operates during working hours.
There is also the CIPS payment system in China, although it can only be used for settling payments in yuan and the platform itself is reliant on Swift. Moreover, Russia's using the CIPS system could be viewed as a breach of a Swift ban, according to the «Reuters» report.
Winding Down in Europe
Sberbank's European operations are being wound down, while its branch in Switzerland is subject to Finma supervision, as finews.com reported Wednesday.
In March, both Sberbank and Gazprom bank were expelled from the Swiss Bankers Association (SBA), in light of Russia's invasion of Ukraine, as finews.com also reported. At the time, the SBA said «Swiss banks maintain strict compliance with all applicable regulations and measures, including sanctions imposed by Swiss, international, and supranational bodies. Integrity and reputation are important key factors for the financial center».
Reuters said Sberbank did not immediately respond to a request for comment.
