The United States and other Western governments announced fresh economic sanctions against Russia late Saturday over the Ukraine war that includes kicking “selected Russian banks” off of the global SWIFT system that financial firms use for cross-border transactions.
“We, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States condemn [Russian President Vladimir] Putin’s war of choice and attacks on the sovereign nation and people of Ukraine,” the countries wrote in a “Joint Statement on Further Restrictive Economic Measures.”
“As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies,” the governments wrote.
The countries outlined four new economic steps that they’re taking to punish Putin for last Thursday’s invasion of neighboring Ukraine.
Most significantly, the government said they will work to cut off unspecified Russian banks from the SWIFT network, which more than 11,000 financial institutions in 200 countries use to facilitate cross-border payments. Observers have characterized kicking Russian banks off of the SWIFT system as perhaps the toughest economic sanction that the West can impose on Russia.
The Western nations wrote in their communique that doing so “will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.”
European Commission President Ursula von der Leyen said earlier Saturday that the move will “effectively block Russian exports and imports.”
Meanwhile, the Western governments also vowed in their statement to impose “restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”
Additionally, the countries announced plans to limit the “sale of citizenship — so-called ‘golden passports’ — that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.”
Lastly, the governments said they’ll soon create a transatlantic task force to identify and freeze the assets of “sanctioned individuals and companies that exist within our jurisdictions. We are [also] committed to employing sanctions and other financial and enforcement measures on additional Russian officials and elites close to the Russian government, as well as their families and their enablers to identify and freeze the assets they hold in our jurisdictions,” the nations wrote in their joint announcement.
The Russian government issued no immediate comment on the Western governments’ moves.
The new sanctions come as Russian troops are fighting around the Ukrainian capital of Kyiv three days after invading the country.
Ukrainian President Volodymyr Zelensky urged his country’s military and individual citizens to fight on against the far more powerful Russian forces.
“We have withstood and successfully repelled enemy attacks. Fighting continues in different cities and regions of our country,” the president said Saturday in a video message. “Each Ukrainian should keep one thing in mind — if you can stop and destroy the occupiers, do it.”
The West’s latest sanctions come one day after Moody’s put Russian-government debt under review for a possible downgrade to junk status.
Seeking Alpha contributor Brad Thomas recently did a deep dive into the Western sanctions, along with a rundown of which U.S.-listed stocks he expects will rise or fall as a result.