Russia's Sberbank Faces Removal From SWIFT

The European Union (EU) aims to cut off Sberbank, Russia's largest lender, from the SWIFT international payment system as Western allies seek to further isolate Moscow from financial markets over its war in Ukraine, Kirstin Ridley and Karin Strohecker reported for Reuters.

Photo Insert: The EU had previously spared Sberbank from what is seen as the harshest measure because it, along with Gazprombank, is one of the main channels for payments for Russian oil and gas.

The latest proposal forms part of the EU's sixth and toughest round of sanctions, which also includes an embargo on crude oil in six months. The measures still have to be approved by the governments of the 27 member states.

The EU had previously spared Sberbank from what is seen as the harshest measure because it, along with Gazprombank, is one of the main channels for payments for Russian oil and gas, which EU countries have been buying despite the conflict in Ukraine.

The latest step could mark a watershed for the EU, which remains reliant on Russian oil and gas as energy prices surge.

The EU's executive Commission on Wednesday proposed to cut Sberbank and two other Russian banks - named by two EU sources as Credit Bank of Moscow and the Russian Agricultural Bank - from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

It is the messaging system for global financial transactions. Being removed from SWIFT makes it very difficult for a lender to make or receive international payments.

Sberbank did not immediately respond to a request for comment. The lender, which exited almost all its European markets in early March, has previously said further sanctions would not have a significant impact on its operations.

Russia's economy, including most of its banks, has been subject to sweeping Western sanctions since the start of what Moscow calls its "special military operation" in Ukraine on Feb. 24. Punishments meted out by various Western capitals saw Russian banks promptly frozen out of the global financial system.

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