What is Swift? What SWIFT stands for, why Russia needs it - and will Swift be used in Russian sanctions?

In his appearance before Members of Parliament in the House of Commons on Thursday afternoon (February 24), UK Prime Minister Boris Johnson outlined further stringent economic and trade sanctions the UK will levy on Russia in line with the European Union and the United States.

Mr Johnson said that along with European and global allies, the UK would be embarking on a “relentless mission to squeeze Russia from the global economy” and reiterated that cutting Russia off from the Swift payment system is “not off the table”.

But what is SWIFT – and what does it stand for?

Here’s what SWIFT is, if Russia needs it and why Swift could be used as part of further Russian sanctions.

SWIFT is the name given to an international payment system and messaging network that transmits information used for transactions across borders across the globe.

The acronym stands for the Society of Worldwide Interbank Financial Telecommunication.

Swift, based in Belgium, is a cooperative of thousands of financial institutions across the world such as banks, asset managers, dealers of securities and exchanges.

It provides a secure network through which messages can be send between these different bodies, across different banks and countries, to allow transactions and payments to take place using its standardised code system.

A unique Swift code, also known and seen more commonly in the UK as a Bank Identifier Code (BIC), is assigned to every different financial institution.

The code is either eight or 11 characters in length and can usually be found on bank statements or wherever you get your account information.

When a transaction or payment is made, a payment transfer SWIFT message will first be sent from the financial institution of the sender to that of the receiver across SWIFT’s secure network – with the payment only going through once the SWIFT message has been received.

2021 saw SWIFT record an average of 42 million of its messages per day, with traffic growing 11.4% more on the same period in 2020.

As with countries worldwide, Russian banks and financial institutions rely on SWIFT to do business with and receive payments from the global community.

Russia is one of the world’s largest providers of oil and gas, so it relies upon mechanisms like SWIFT to receive funds for its commodity sales worldwide.

And because of this, cutting Russia off from the payment network has been considered one of the toughest ways to weaken Russia in response to its attacks on Ukraine.

Russia has its own alternative to SWIFT in the form of its System for Transfer of Financial Messages, which it introduced in 2014 after its annexation of Crimea saw the threat of SWIFT revocation first rear its head.

There are number of world leaders pushing for Russia’s access to the Swift payment system to be revoked as part of sanctions on the country following its attack on Ukraine.

Ukrainian President Volodymyr Zelenskyy is among them, tweeting on Thursday afternoon to reinforce his ask that allies commit to the hardest-hitting sanctions on the country – including disconnecting Russia from Swift.

"A package of additional tough sanctions against Russia from the EU is approaching,” Mr Zelenskyy wrote on Twitter.

"Discussed all the details with @EmmanuelMacron.

“We demand the disconnection of Russia from SWIFT, the introduction of a no-fly zone over Ukraine and other effective steps to stop the aggressor.

Boris Johnson likewise told MPs in Westminster on Thursday evening that Swift could remain part of considerations of further sanctions on Russia.

“I know that this house will have great interest in the potential of cutting Russia out from Swift, and I can confirm as I've always said that nothing is off the table,” Mr Johnson said.

Dmytro Kuleba Ukranian Minister of Foreign Affairs is among a number of European leaders calling on the EU to revoke Russia’s access to the payment system.

"I will not be diplomatic on this,” said Mr Kuleba in a tweet on Thursday afternoon.

"Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too.

"BAN RUSSIA FROM SWIFT.”

The Ukrainian Foreign Affairs Minister’s social media post was quote-tweeted by SNP Westminster leader Ian Blackford, who wrote: “I completely concur with

@DmytroKuleba”

“Russia must be banned from SWIFT.

"We need a full and unequivocal response to the Russian invasion #StandWithUkraine”

But while a number of leaders are calling for the move to take place as part of severe sanctions on Russia, others appear reluctant to use the measure too soon amid fears over increased aggression or disruption to global energy supply chains.