All Russian banks already subjected to Western sanctions will be excluded from SWIFT, with the possibility open for other Russian banks to be excluded as well, the German government announced on Saturday.
"This is intended to cut off these institutions from international financial flows, which will massively restrict their global operations," the country's spokesperson stated.
The spokesperson added that the Western nations "stressed their willingness to take further measures should Russia not end its attack on Ukraine and thus on the European peace order."
In addition, the European Commission released a joint statement signed by the leaders of France, Germany, Italy, the UK, Canada, and the US in which they condemned the current military operation and committed to implementing restrictive measures against Russia.
"We commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions," the statement said.
Furthermore, procedures for getting citizenship abroad for wealthy Russians will be limited, and the prospect of obtaining a so-called golden passport and consequently European citizenship will be eliminated.
The leaders also agreed to set up a special working group of EU and US representatives to ensure that anti-Russian sanctions are implemented quickly.
"We commit to launching this coming week a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions," the statement explained.
Prior to the decision made at a joint discussion of the Western leaders, the media reported that Germany had assessed its support for disconnecting Russia from the international payment system as possible under "certain conditions."
US Predicts World Banks Will Stop Transactions With Deswifted Russian Banks
Following the announcement, a senior US administration official said that the US believes the decision to remove key Russian banks from SWIFT will stop their ability to engage in global transactions.
"First, our leaders decided to follow the Iran model and disconnect key Russian banks from SWIFT," the official said during a conference call on Saturday. "If one of these deswifted Russian banks wants to make or receive a payment outside of Russia, such as a bank in Asia, it will now need to use a telephone or a fax machine. In all likelihood most banks around the world will simply stop transacting altogether with Russian banks that are removed from Swift."
Western Sanctions Pressure on Russia
Several major Russian banks, including Sberbank and VTB, fell under the new sanctions after the country launched its military operation in Ukraine. Under the measures, a number of Russian state-owned companies have been prohibited from attracting foreign capital.
Sanctions have also been imposed on the industry and supply of high-tech products to Russia. Germany has stopped certification of the Nord Stream 2 gas pipeline, while the UK closed its airspace to Aeroflot, the biggest airline in Russia.
The Russian authorities said they had prepared a plan of action in advance in case of a new wave of sanctions and would provide all necessary support to businesses that fell under the restrictions, ensuring the smooth operation of the economy.
Moscow said it is working on retaliatory measures, but the details have not been disclosed yet.
Russian President Vladimir Putin signed decrees recognizing the sovereignty of the Donetsk and Lugansk People's Republics on February 21, which was followed on February 24 by Russia's launch of a special military operation in Ukraine. The Russian Defense Ministry stated that Russia does not intend to occupy Ukraine and the servicemen will leave the country after the operation.
At the same time, Moscow was ready for peace talks, and President Putin ordered to suspend military advance, but had to resume it after Kiev rejected the offer to negotiate.
A spiral of Western sanctions has been unfolding since 2014, following the reunification of Crimea and the city of Sevastopol with Russia by referendum, in which more than 95% of the residents voted in favor of rejoining Russia.