The US and the European Countries on Saturday announced they were expelling Russian banks from the SWIFT (Society for Worldwide Interbank Financial Telecommunication) global bank-to-bank payment system. SWIFT is the main messaging network through which international payments are initiated.
The move, intended to punish Russia for its invasion of Ukraine, will have at least one unintended consequence: impoverishing hundreds of thousands of retired Jews living in Israel, Western Europe, the US, and Canada who receive a pension from Russia, having worked in Russia or the Soviet Union before immigrating. They are entitled to a pension from the Russian government – women at age 55, men at 60.
These monthly payments amount to about $100.
There are two methods by which retired former citizens of Russia collect their pensions: 1. They open a special bank account in Russia where their pension is deposited, and transfer the money to their account outside the country – these pensioners will probably lose access to their money; 2. The social security authority in their new home country collects the funds from the Russian government and delivers it to them – it’s not clear whether these pensioners will be spared.
A senior Biden administration official told reporters on Saturday that “Putin’s government is getting kicked off the international financial system. To be clear, this is a sad outcome for the people of Ukraine, the people of Russia, and many others. This is not where we want it to be. But this is Putin’s war of choice, and only Putin can decide how much more cost he is willing to bear—the United States and our allies and partners are unified and will continue to impose costs.”
The decision to remove the Russian institutions from SWIFT was announced by the US, the European Commission, the UK, Canada, France, Germany, and Italy. Their leaders on Saturday issued their commitment to the following measures against Russia:
“First, we commit to ensuring that selected Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.
“Second, we commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.
“Third, we commit to acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government. Specifically, we commit to taking measures 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.
“Fourth, we commit to launching this coming week a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions. As a part of this effort, we are 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. We will also engage other governments and work to detect and disrupt the movement of ill-gotten gains, and to deny these individuals the ability to hide their assets in jurisdictions across the world.”
