US, Allies Take Big Step Against Russian Banks

The US and its European allies agreed Saturday to shut certain Russian banks out of SWIFT, a major messaging system critical in making global financial transactions. The leaders, including President Biden, had been dismissive this week of the likelihood they'd take this step to hurt Russia's economy after its invasion of Ukraine. "Even beyond the measures we are announcing today, we are prepared to take further measures to hold Russia to account for its attack on Ukraine," the nations said in a joint statement, the Hill reports.

In addition to curbing access to the Society for Worldwide Interbank Financial Telecommunication system, the allies said they're taking steps to keep the Russian Central Bank from using its reserves to mitigate the sanctions imposed by other nations after the attack. The US cannot on its own expel Russia from SWIFT, and Biden said this week that European nations don't want to go that far, per CNN. Germany and Italy especially have been reluctant, per NBC News; the European economy is more closely connected to Russia's and could suffer from a SWIFT expulsion. But positions in Europe have hardened as Russia's attack has progressed; Germany changed its mind Saturday on sending Ukraine arms.

The decision is a major escalation in sanctions and carries risks, per the Washington Post. Russia—which has reminded the world it has nuclear weapons—could argue its money is being held ransom by the allies. The allies also announced new limits on Saturday so-called golden passports, which allow wealthy, well-connected Russians to become citizens of other countries. They can then keep access their financial systems and avoid the pain of sanctions. In the US, investors gain citizenship through the EB-5 and E-2 programs. (More Russia-Ukraine war stories.)