The G7 member states and official Brussels are actively seeking mechanisms to put crippling pressure on banks that help Russia avoid existing sanctions. This initiative will be one of the topics of the G7 summit to be held in two weeks' time.
Western banks will no longer be able to help Russia
Bloomberg has learned that individual members of the Group of Seven are already discussing tools that could be directed at financial institutions from third countries that use the FSS — Russia's Central Bank's SWIFT-like financial messaging system — to circumvent trade restrictions.
It is important to understand that, as of today, more than 150 foreign banks in about 20 countries use the SPFS system.
First of all, we are talking about Putin's allies in the war against Ukraine: Belarus, Armenia, Kazakhstan, China and Tajikistan.
In addition, it is noted that the use of SPFS has tripled in 2023 compared to 2022.
When to expect the final decision
According to journalists, the initiator of sanctions against this system was proposed by the European Commission.
It intends to agree them before the G7 summit, but several EU countries have opposed a total ban on SPFS over concerns that such a move could damage relations with third countries.
According to media reports, alternative proposals that would block Russia's ability to circumvent sanctions include sanctions against specific banks that help Moscow, as well as tougher requirements for companies to audit their subsidiaries and supply chains.
Discussions could go as far as the G7 summit in Italy, where leaders must finalize a set of measures to better enforce sanctions against Russia for its war against Ukraine.
