Silent Cut: Western Banks Refuse to Transfer Money From Crimea via SWIFT

Western banks are refusing to transfer payments from Crimea in foreign currencies via the SWIFT banking transaction system, whether they are executed by Crimean citizens or by companies registered in the peninsula.

In the event that a western bank sees in the SWIFT network that a payment has been made by a resident of Crimea or a company registered in the peninsula, it blocks the transfer, Russia’s business daily newspaper Vedomosti reports on Tuesday.

It does not matter if a payment is actually made through a Crimean bank or through any other Russian bank, the newspaper quotes an employee of one of the payment systems as saying, without disclosing his name.

“If a client is registered in Crimea, foreign banks will block the foreign currency payments which are made by the client,” the paper quotes another employee of a Russian payment system as saying. He also adds that similar blocking measures are being applied to companies registered in Crimea.

Russia’s business news agency RBK confirms that such silent rules are actually in place, quoting a source in the Bank of Russia.

The rule so far works only one way: one can easily transfer payments in foreign currencies from Russia to Crimea, but similar payments the other way, from Crimea, will be blocked.

This peculiar feature results from banking regulations which specify that a client making a transfer shall specify the regions of the sender, while there is no rule that the region of the addressee must be specified.