So you think the EU has done more for Ukraine than the UK? Think again the EU dilutes and delays sanctions on Russia — sells out Ukraine
How SWIFT became SINO — sanctions in name only
This is the ugly truth
The Ukrainians wanted a ‘no-fly-zone’ but were offered sanctions with more holes than a sieve
After public demands for firm economic sanctions that will hurt Vladimir Putin’s war machine, the truth has emerged that what is being told to the public is not the whole truth.
Reports grow of Russia’s conscripts openly protesting about their orders to fight other Slavs and over a million Ukrainian refugees have crossed the borders of friendly neighbouring states. Meanwhile, many EU citizens — and certainly many British people — hoped that sanctions would put fresh pressure on the Russian President to halt his assault.
In true ‘Pravda’ style, the EU pretends it is whiter than white
EU Commission President Ursula von der Leyen
“At the speed of light, the European Union has adopted three waves of heavy sanctions against Russia’s financial system, its high-tech industries and its corrupt elite. This is the largest sanctions package in our Union’s history. Today’s decision to disconnect key Russian banks from the SWIFT network will send yet another very clear signal to Putin and the Kremlin.”
- Statement, EU Commission President Ursula von der Leyen, 02 Mar 2022
This is wholly disingenuous and misleading, however
After analysing the EU’s official information, I can report what has now been agreed for the sanction regime bears no comparison to what EU politicians claimed they would enforce.
I accessed the Official Journal of the European Union and studied the new Directive as well as its Annex. It transpires that only seven Russian banks have been sanctioned.
Reaction from Poland was swift and condemnatory
Polish Prime Minister Mateusz Morawiecki
“I call on our partners in the European Commission to implement a bold and crushing sanctions package that will be as severe as possible on Russia. Only this can bring about a change in Russian policy! Backstage talks are underway in Brussels to exclude Sberbank and Gazprombank from the sanctions. We are strongly against it!”
“As Poland, we demand that all Russian entities, thanks to which Russia finances the war in Ukraine, be effectively and fully covered by sanctions.”
- Polish Prime Minister Mateusz Morawiecki, on Facebook, 2 March 2022
In short, a large number of Russian banks have been left off the sanctions list and payments for Russian oil and gas have been exempted.
It has turned out that the EU members were once again deeply divided on what course of action to take. EU27 countries such as Germany and Czechia that allowed themselves to become dependent on Russian energy supplies are looking to maintain their payments.
Sanctions in Name Only (SINO)
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication and links more than 11,000 financial institutions in over 200 countries and territories.
It reports that it sends over 42 million messages per day that facilitate domestic and international business deals.
The list of only seven Russian banking institutions to be expelled from SWIFT are:
- Bank Otkritie
- Bank Rossiya
- VNESHECONOMBANK (VEB)
- VTB BANK
- While war rages on, the sanctions will not be immediate but have been given 10 days before the introduction
- Two of Russia’s largest and most important banks have been left off the list:
- Sberbank, Russia’s largest bank valued at 37.50 trillion Roubles, and
- Gazprombank, Russia’s third-largest bank valued at 7.53 trillion Roubles
Sanctions had to be all or nothing — so some key Russian banks were not sanctioned at all
The manner in which SWIFT’s legal procedures operate meant that it was not possible to allow some payments to be made (such as for gas) and not others (everything but gas). A bank has to be fully expelled or not at all. In the end, the countries in SWIFT needing to pay for their Russian gas prevailed and so the sanctions have become weak.
Russia’s gas sales account for 60% of its exports — with more than half that amount going to EU27 countries. The total sales account for a third of the Russian Federal Government’s budget
Half-hearted EU sanctions more sloth than swift
Just imagine, you are a political leader of your country and you want to influence a war where people are dying every day if not every hour. You want to put the brakes on what is happening. Without being able to deploy troops or aircraft you have only one tool in the box — economic sanctions. Do you introduce the sanctions immediately or in 10 days’ time, when thousands more people will have undoubtedly died and it may be impossible to halt?
And, do you include all of the banks from the aggressor nation, or just enough that sounds good but only represents 25% of the aggressor’s banking sector?
Imagine you choose to go for “in 10 days’ time” and “just 25% of the banking sector”. Job done?
Well, that is precisely what the EU member states have decided upon, with deep unhappiness from countries such as Poland. A veto was available to those countries such as Germany who rely on Russian gas and claim they need SWIFT to pay for it.
So what we have is Sanctions in Name Only — SINO — a con on the public and British Parliamentarians who called for a tough economic straightjacket for President Putin.
There is of course one way round this appeasement of the aggressor. That is for the US Treasury to sanction those EU banks that treat with Russian banks. Threaten to remove their US banking licences and very quickly we would see the errant EU banks come into line and show a willingness to stop transactions with Russian banks.
[ Sources: EU Commission | Official Journal of the European Union | Polish Prime Minister’s Facebook |