© Reuters/Chris Helgren
"It's no secret that there are threats, primarily from the United States, to disconnect Russia from the SWIFT system," said Dmitry Birichevsky, director of the Economic Cooperation Department of the Russian Foreign Ministry.
Speaking on RIA Novosti on Monday, the diplomat noted that Russia has concerns that SWIFT could get caught up in a "spiral of sanctions," led by Washington.
However, the senior official doesn't think America will act on this threat any time soon. Noting that Russia would be able to come to payment agreements with their trading partners anyway, he said:
"I'm actually confident that we won't be disconnected from SWIFT anytime soon, and maybe never. Since 2014, Russia has been working on its own payment system. This system already exists. We all use the MIR card. It is also accepted in a number of neighboring countries and in Turkey. Negotiations are also underway with other partners."Last month, politicians from the European Parliament voted in favor of a resolution to condemn what they called Russia's "military posturing close to the country's border with Ukraine." The MEPs agreed that, "should military build-up lead to an invasion," Moscow should be excluded from SWIFT, along with other economic measures.
Proposals to cut Moscow off from the world's leading international payment system are not new. After seven years of threats, Russia is now in a position where losing access to SWIFT would no longer be a disastrous blow. The country has created its own alternative, called SPFS, which works domestically, and Moscow is looking to expand the system internationally.
Moscow has previously warned it would consider such a move "a declaration of war." Former Prime Minister Dmitry Medvedev, who now serves as deputy chairman of the Security Council of Russia, has also dubbed it a "punch in the gut."
SWIFT is fraught with fraud. All payments are final, unless you (another bank the transaction infor ation came from) can interupt the transfer, which is hard to do, especially when it goes over sea's, as usually those banks are closed, when they are open, your bank is closed. So if you send the money to the wrong account, whoever receives the money (cause all banks sign covenants about the finality of payment) all you have to do (if you the wrong account they sent the money to), is move it to another account, with the recieving bank or SWIFT wire it to another. No bank can take the money back without first contacting you.
All you need to do is convince a large corp, that you are another large corp they owe money to and give them updated account info to make payment to. If their due diligence is faulty or insuffcient, Bob's your uncle, you'll get the cash. Just make sure they can't trace it back to you.
This happens everyday, all the time on the SWIFt network.
By cutting SWIFT off to the Russians, what they are in fact doing is limiting how they can send money outside Russia (which is a misnomer) because the money (currency of the country) never leaves the country. Cash can, but digital tender can't. Hence Russia, China and Brazil are building their own system.
So if the USA wanted to play real hardball, they would freeze funds of those Swiss banks with USD accounts in the USA, effectively freezing the USD account in Switzerland. That's the easy part!
The rest is smoke and mirrors!
What creeped me out the most about banks, is when they put the word "covenant" in the loan guarantees all the corporations sign, to get access to funds. Funds that aren't real tangible cash. I called it imaginary money as it wasn't real, since there was nothing behind it to back it up. How can you take in $1 million in deposit and loan out $1.9 million to someone else?
The mob knows this, but they deal in cash. So if they lend you $50k, they are lending an actual $50k they can't take that $50k and lend out $90k in cash. Which kinda explains they heavy handedness in their collection process. But once it's digital, the sky is the limit.