Europe failed to agree on SWIFT alternative

Russian government’s hopes for creating an alternative payment system in Europe, which would have allowed avoiding U.S. sanctions, seem to be groundless.

A project, which has been announced by the head of the German Ministry of Foreign Affairs Heiko Maas in August, and which has been conceived as a way to continue trade with Iran with U.S. sanctions conditions, is close to failure.

Not a single EU country did not agree to place a structure in its jurisdiction to avoid limits in relation to Tehran, Financial Times stated with the link to Brussels sources.

According to the words of European diplomatic officials, the problem has been discussed during the Eurocomission meeting last week. The plan was to create a special purpose vehicle (SPV) in order to bypass anti-Iranian sanctions by transferring export-import operational payments through it. The deadline discussed was November when the second round of limitations is going to be implemented together with Iranian oil trade cut.

Although, not a single European government wished to cross the American road so far, hosting an SPV, as FT source declared.

According to the words of another diplomatist, European Union states are cautious that the U.S. might implement political measures against them in that case, or even provide sanctions.

The Secretary of State Head Mike Pompeo stated in September that a special vehicle creation to avoid sanctions is ‘one of the counterproductive decisions which could be imagined, from the point of global and regional security’.

Mike Pompeo
Source: Foreign Policy

The project was approved in Russia which is under the threat of sanctions against state banks with a possible prohibit of using dollar transactions.

Russia is ready to join an independent from the U.S. payment system, First Vice-Premier Minister and Finance Minister Anton Siluanov said on October 5.

“That would become an answer to the limitations which are implemented by the U.S. to corporations as well as the financial institutes providing payments in dollars”, - he explained.

Russian Central Bank did not receive an invitation to join a European payment system similar to SWIFT so far, as Central Bank President Elvira Nabiullina told after two weeks.

She also reminded that an alternative to the SWIFT payment system is already created in Russia (the System of Sending Transaction by the Bank of Russia). Moreover, a technical possibility is already done for connecting foreign users to the system.
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