By Elizabeth Chukwuma
For rolling out military tanks and other offensive air missiles against military installations in Ukraine Republic, may have triggered the leading members of the North Atlantic Treaty Organsation, NATO, to unveil series of sanctions against the Russian Federation aimed ‘’asphyxiating Russia’s economy. The US and its allies, were said to have targeted the banks, military exports, oil refineries and also sever it from the global payment system, described as the worse of the sanctions.
The US and its allies were said to have been joined by the Asian countries of Taiwan and Japan, in imposing the sanctions on Russian. There are indications that China, described as one of the major importers of Rusian oil and gas, will turn its back on the country as being pressured to do so by the US.
Aware that the Russian Banks had raised over $600 billion to support the Kremlin in the war against Ukraine, may have informed why the NATO member countries had agreed to disconnect 10 top Russian banks and Financial Institutions from the Society for Worldwide Inter-bank Financial Telecommunication, SWIFT which were said to be holding about 80% of the Russian banking sector sector’s total Assets, out of 30 such banks operating in the country.
. For a start, the G10, Central Bank, countries, controlling the SWIFT Operations, were said to have singled out the state owned Sberbank and VTB Bank, described as the two largest banks in the country to test run their action. There are indications that the sanction list also include Otkritie, Sovcombank, Novikonbank and some top executives of the affected banks for now.
Financial analysts also believe that, the US and its allies could remove Russia from SWIFT, because it is overseen by the G10 Central Banks as well as the European Union Central Bank with it lead overseer, National Bank of Belgium. According to Russian National SWIFT Association the country has the second largest number of users after the US, with some 300 Russian Financial Institutions in the system, more than half of Russian’s Financial Institutions.
SWIFT, according to informed sources, is an Independent enterprise based in Brussels, Belgium, controlled by over 3,5000 firms from across the world serving as an internal messaging system between more than 11,000 banks and Financial Institutions in over 200 countries and territories including Russia .
The NATO leading member countries may have taken the decision to remove Russia from SWIFT ‘’to rubbish the Russian banks and its economy and subsequently force Putin, to withdraw the country’ troops from Ukraine two major cities of Kyiv, the Capital and Kharkiv .
As a prelude to actualising its dream of crippling the Russian economy, the US banks have already sever their Correspondent ties which allow its banks to make payments between the one another and move money around the globe, with Russia’s largest bank, Sberbank, within 30 days. The removal of Russia from SWIFT, analysts had said had effectively kicked out Russian banks out of the US, Financial sysyem , bans their trade with Americans and freezes their US, Assets.
SWIFT Group removal of Russia from its list, based on the decision of the US and its allies decision ‘’to impose sanctions on the country speaks volume. The Group had said that the decision to impose sanctions on countries and individual entities participating in SWIFT ‘’ rests solely with the Competent government studies and applicable Legislators’’, stressing that as an enterprise incorporated under the Belgium law, their obligation, first is to comply with related EU and Belgium regulations ’’.
Joe Biden, the US, President and its allies, may have had at the back of their mind that the Russian Central Bank might want to make nonsense of the sanctions in order not to have any devastating effect on the people, by deploying its hug international reserves to the economy that the NATO leading member country have also planned to come up with other restrictive measures that will prevent the Russian apex bank from doing so.
The argument in NATO circles was that the only way Russian’s economy could survive the US and its allies sanctions for invading neighbouring Ukraine would be to access the over $600 billion war chest of the country’s foreign reserves. The wide range measures that would be further imposed on Russia, according to a Statement released by the White House on Thursday, February 23, 2022, includes restrictions on semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics, and maritime technologies. It was said to have equally targeted the country’s military end-users, including the ministry of Defence., Attracts Anger Of Us
More damaging of the wide range of measures to cripple the Russian economy over its invasion of Ukraine, was the sanctions on two significant Belarusian state-owned banks to forestall the Russian government from using it for the transactions. Japan, which may not have forgotten its experience in the hands of the US, during the sWWII, because of the events in pearl Harbour, which led the dropping of Atomic bomb in Hiroshima and Nagasaki, two sprawling industrial cities, may not have wanted history to repeat itself as it is toying the line of US and its allies to strengthen the sanction against Russia by cutting –off Correspondents ties with banks and Financial Institutions as well as halt export s of military used equipment such as semiconductors to the country.
There is no gainsaying the fact that the sanctions from the US and its allies, including Japan and other Asian countries, will deliver a big shock to Russian companies and customers, particular, buyers of the country’s oil and gas exports denominated in dollars, particular , the heavy industries in China, Japan and South Korea.
Oil and gas , accounts , for about 40% of Russian ‘s annual revenue which might drop , as China, reconsiders ,buying its oil and gas from the member countries of the Organisation of Petroleum Exporting Countries, OPEC, to bridge the gap created with the sanctions on Russia, which made trading with the country and making payments difficult in the recent time. Although, the the US and its allies, had taken the decision to remove Russia, from SWIFT, with the intention that it would only have adverse effect on the Russia economy, the Value News findings shows that the big time economies in Europe and Asia are also being affected because of the reduced volume of oil and gas exports from the OPEC, member countries to service their plants.
However, military analyst would want the leading NATO members and G10 Central Banks, controlling SWIFT, to trade with caution in their sanctions against banks and Financial Institutions in Russian under the present circumstance. This is because the system does not move money but only moves the information about the money. Take for instance in 2021, it had recorded 42 million messages daily and 82 million messages between February 1, 2022 and now, that includes currency exchanges, trades and more. Joe Biden, US, President, had made clear to those that cares to listen that the decision to impose sanctions on Russia over its invasion of Ukraine was ‘’to collectively ensure that the invasion is a ‘’strategic failure for Putin’’.
Denys Shmmhal, Ukraine, Prime Minister, is happy that the US and its allies had sanctionsed Russia, particular, removal from the SWIFT that, had put the country’s banks and Financial Institutions into trouble.
The Ukraine Prime minister, who may have spoken the mind of Volodymyr Zelensky, the country’s President , when he tweeted that’’ the country appreciates the US and its allies ‘’ support and real help in this dark time’’, stressing that ‘’the Ukrainian people will never forget this US and its allies support, as they are still holding on to the Russian Army in the war. The US and its allies, may not have deployed troops to Ukraine to fight alongside the country’s military against Russia military, but were said to have supported the country with the export of arms and ammunition through Poland. Military analysts had said that the type of arms that have entered Ukraine in the last one week have never been seen in any war in Europe before.
The US and its allies support to the Ukrainian government in the ongoing war with Russia, may have emboldened the Ukrainian President, Zelensky, who is talking tough on where to hold talks with Putin to end the crisis. He has rejected moves to slate the talks in Belarus, a country believed to be in support of Ruusia.
The Ukrainian President, was said to have proposed to hold the talks, with the Russian strong man in the Capitals of Poland, Slovakia, Hungary, Turkey or Azerbaijan but Putin had remained silent, meaning that the war will still drag on to help the west sell their arms.