Global Banks Rush to Comply With Russian Sanctions

Senior management and compliance teams at major banks have been working vigilantly to understand the new sanctions imposed on Russia, Reuters reported Sunday (Feb. 27).

The banks were “scrambling” to make sure they got the full idea behind the restrictions, including which Russian lenders had been banned from the SWIFT international payments system.

The SWIFT ruling came down without naming any of the Russian banks.

Global financial markets were set to open within hours, so banks had staff “working on overdrive” to get everything ready with the sanctions — leading to “frantic” calls to governments and regulators to fill in the gaps in knowledge.

One European bank source said it was looking into getting more time to make the changes, so as to be as compliant as possible, according to the report.

Global banks have a lot of experience with sanctions, and they’ve invested a lot in compliance programs in recent years. However, doing so for a country as massive as Russia is another ball game.

Banks in Iran and North Korea have been kicked off SWIFT in the past, but their banks were not significant global trade participants. Banks usually take a lot of caution and would do so until the picture is clear, one anonymous source from a U.S. bank said. The source also noted it was prioritizing changes that needed to be implemented immediately.

PYMNTS reported previously on the removal of Russia from SWIFT, writing that it was likely to be a thorny and complex matter.

See also: Why Removing Russia From SWIFT Won’t Be Simple

That report noted that President Biden announced the sanctions from both the U.S. and Europe among other allies, in response to Russia’s invasion of Ukraine.

Biden said the sanctions were going to “inflict a severe cost on the Russian economy,” but did not initially commit to removing Russia from SWIFT.

SWIFT, or the Society for Worldwide Interbank Financial Telecommunications, is a Belgian messaging service. It connects more than 11,000 financial institutions worldwide.