What Will Happen If Lukashenka Regime Is Disconnected From SWIFT?

This is the initiative of the European Parliament.

The European Parliament adopted a resolution calling for the disconnecting of the Lukashenka regime from SWIFT. Many experts believe that this could be a powerful blow to the official Minsk.

"So far there is no worthy alternative to SWIFT, there are projects, but from the point of view of the current alternative that can replace it at once, there is no such thing, this is very serious. Considering how international payment cards - Mastercard, Visa are widespread in our country, they cover almost the entire market, even the Belkart project is going along with Mastercard, if these things are affected, there may be a shutdown of the payment infrastructure. And plus the reputational costs for Belarus in the eyes of investors, even if this is not for long," said economist Viachaslau Yarashevich.

What is SWIFT

SWIFT is an abbreviation for Society for Worldwide Interbank Financial Telecommunications, which translates as "Society for Worldwide Interbank Financial Telecommunications". In fact, SWIFT is an international interbank system for transferring information and making payments. It enables financial institutions around the world to swiftly exchange financial transaction information in a secure, standardized and reliable manner.

The system was created almost 50 years ago - in 1973. Its co-founders were 239 banks from 15 countries of the world. At the moment, over 11 thousand financial institutions in more than 200 countries are connected to SWIFT.

On average, more than 30 million messages about financial transactions are exchanged in the system every day. There are three data centers for their processing - in the USA, the Netherlands and Switzerland. If one of the data centers fails, the others will be able to handle the traffic of the entire network.

In the autumn of 2006, a scandal erupted when several American publications, including The Washington Post, published materials on how SWIFT, after the terrorist attacks on September 11, 2001 in the United States, began to transfer personal data of clients to the American authorities for anti-terrorist investigations.

Thus, it was emphasized in the articles, SWIFT violated the confidentiality rules established in the European Union, on the territory of which - in Belgium - the main office of this international system is located.

What is the risk of disconnection from SWIFT?

Countries disconnected from SWIFT will not be able to make interbank transactions, primarily to make payments outside. That is, absolutely all exports and imports will be jeopardized, which will cast a colossal blow to the Lukashenka regime.

Which countries have been disconnected from SWIFT?

Over the nearly half-century history of SWIFT, only two countries have been disconnected from this system - the Democratic People's Republic of Korea (DPRK) once, and Iran twice.

In March 2017, SWIFT stopped serving banks from the DPRK. This happened after the UN heard a report on how SWIFT had been providing services to North Korean financial institutions included in the sanctions lists of the UN Security Council for several years, "earning dozens of thousands of euros on it."

The central bank of Iran and all financial institutions of this country were first disconnected from SWIFT in March 2012 (Iran was returned to the system after the partial lifting of sanctions), then in November 2018 (the decision was taken under pressure from the United States, which during the presidency of Donald Trump withdrew from Iranian nuclear deal, and restored sanctions against official Tehran).

At the end of 2020, the Iranian authorities called on Russia to create a replacement for SWIFT for the member countries of the Shanghai Cooperation Organization (Russia, China, India, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, and Uzbekistan. Iran has the status of an observer country in the organization). The country's first vice-president, Eshak Jahangiri, stressed that the development of new banking and financial mechanisms would allow Iran and Russia to avoid "arbitrary world sanctions."