A bill allowing foreign legal entities to join Russia’s alternative to SWIFT – the international system for transfer of financial messages – has been submitted to the lower house of Russia’s parliament, the State Duma, Kommersant reports.
The bill offers a direct exchange of messages about financial transactions for both Russian and foreign companies. The goal is to safeguard accounts between sanctions-hit companies and foreign contractors, officials say.
Russia has developed its own system for financial transfers that would protect it from a potential shutout of the SWIFT global transfer system in the event of harsher U.S. sanctions.
Negotiations are currently underway between the Eurasian Economic Union and BRICS, and lawmakers believe that it’s highly likely that agreements may be reached on providing access to the Russian system for China, Iran, and Turkey.
According to the Bank of Russia, the SPFS system currently has 400 participants, including banks, the Federal Treasury, legal entities, and corporate clients.
“Inside the country, our system fully solves the problem of sending financial messages,” the regulator said. “Speaking about transborder operations, their implementation would be possible only provided that an agreement between several countries was reached. Such discussions are being held between the EAEU and BRICS.”
“Although they plan to have accounts with Russia in national currencies, they do not rule out that the accounts may be carried out through Russia’s alternative to SWIFT,” said head of the State Duma’s Committee for Financial Markets Anatoly Aksakov.
The SPFS was launched in December 2014 to safeguard Russian banks from the risk of being cut off from SWIFT, an international banking system for transferring information to carry out payments, after the first U.S. and EU sanctions were introduced against Russia.
