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Swift Justice: One Way to Make Putin Howl

Barring Russian banks from the global payments system would clobber the nation’s economy
Swift Justice: One Way to Make Putin Howl
Photograph by Sergei Chirikov/AFP/Getty Images

What could be the West’s ultimate weapon against Russian President Vladimir Putin is a little-known organization housed in a neoclassical building on a wooded campus in a Brussels suburb: the Society for Worldwide Interbank Financial Telecommunication, or Swift. The group, run as a cooperative by banks, operates a secure messaging system for moving money across borders. Whether it’s an investor sending funds for an overseas project, a company getting paid by a foreign customer, or a parent topping off the bank account of a child studying abroad, it almost always goes through Swift. It processes trillions of dollars in transactions every day for its 10,500 member banks in more than 200 countries.

Now some of Putin’s critics want to expel Russia from the network as punishment for his actions in Ukraine. Britain is pressing the European Union, whose laws govern the cooperative, to bar Russian banks from using Swift. Being frozen out could wreak havoc with Russian trade and investment. A similar penalty imposed in 2012 on Iran’s banks had “profound” economic effects in that country, says Mark Dubowitz of the Washington-based Foundation for Defense of Democracies, which lobbied for the Iranian ban—the only such ban Swift has imposed. In talks with the West, “Iranian negotiators have systematically demanded that this is one of the sanctions that should be relieved first,” he says.