Summary
The sanctions imposed by the US, the European Union and the UK on Russia will come into effect from this week. Earlier, US President Joe Biden said, if the sanctions are not imposed, the last option would be to start the Third World War. According to EU Commission Chair Ursula Vaughan, Russian banks will not be able to transact internationally due to the sanctions, which will affect their import-export.
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Expansion
The restrictions will come into effect from this week. Earlier, US President Joe Biden said, if the sanctions are not imposed, the last option would be to start the Third World War. According to EU Commission Chair Ursula Vaughan, Russian banks will not be able to transact internationally due to the sanctions, which will affect their import-export.
Expected to destroy the Russian economy… Although the financial transactions of oil and gas were kept separate, they would give 40 percent of the revenue to Russia.
This is how Swift system works
Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a financial messaging system. Suppose a person in Delhi wants to send money from a bank account here to a friend in Bank of America, Washington. His bank account number and Bank of America SWIFT code will have to be disclosed to the branch. This branch will take the money and send a SWIFT message of payment to Washington. The Washington branch will confirm the message and release the payment. 11,000 banks in 200 countries are connected to this system.
Swift has options, but limited
- Apart from SWIFT, there are also options like Fedwire, Ripple, SPFS, Chips, etc., but at a limited level.
- SWIFT is very large in comparison to them, it is run by 11 countries and their central banks together with Belgium.
- For Russia, SPFS can become a temporary option. After the annexation of Crimea in 2014, it was prepared by Russia against Swift.
Ineffective: Russian banks are already banned from the US. Transactions for oil and gas were kept out of the ban. Russia gets 40 percent of its revenue from this, so the latest sanctions are not considered very effective. According to experts, it is only the effect of widespread financial sanctions. In 2012, the US completely pulled Iran out of the SWIFT system. 50 percent of its oil export revenue was closed, 30 percent of its foreign trade also ended.
effect: The US expects the central bank to freeze assets worth $63 billion. Although Russia was preparing for this also since 2014. The initial impact could be in the form of a fall in the ruble against the dollar. Inflation may also increase to a certain level.
Impact on yourself too: The US and Germany may also have to bear the loss of excluding Russian banks from the SWIFT system, which has a big business with Russia. The entire EU trades with Russia at $8,000 million, which is 10 times more than the US.
because Europe needed to see
Experts are considering the financial restrictions to be mild. Europe is the largest buyer of oil and gas from Russia. Financial transactions are exempted for these. Whereas 40 percent of Russia’s revenue comes from this. If there was strictness here, then the price of oil and gas in Europe would have increased rapidly. The supply of these things could also be affected.
No ‘Golden Passport’
Germany said, now richer Russians involved in the Russian government will no longer be able to get the ‘Golden Passport’. They will not be able to take advantage of the financial system here by becoming European citizens.
Russian flights to Canada and EU banned
Toronto. The European Union and Canada closed their airspace for Russian flights from Sunday. Not only this, America is also considering taking the same step. After Britain, Germany, Spain, France along with the Nordic and Baltic countries have announced a ban on the use of their airspace over Russia.