On February 24, after Moscow's full-scale "invasion" of Ukraine, Ukrainian Foreign Minister Kuleba called for the closure of the SWIFT international settlement system against Russia. Subsequently, the U.S. White House announced severe new sanctions against Russia, which will freeze all Russian assets in the United States.

, and working with allies to limit Russia’s ability to do business using dollars, euros, pounds and yen.

He also said that excluding Russia from the SWIFT system has always been one of the options.

Many Western media believe that SWIFT sanctions are nuclear weapons and, if used, will have a devastating impact on the Russian economy.

So what exactly is the “SWIFT system”?

How powerful is it?

How to respond?

(1) What is SWIFT?

1. Definition: The full name is "Association for Worldwide Interbank Financial Telecommunication". It is a non-profit international cooperation organization among international banks. It was founded in May 1973 and is headquartered in Belgium. Two information exchange centers are established in the Netherlands and

U.S.

2. Birth: Due to the different standards of currencies and financial institutions used by countries, cross-border payments and settlements are difficult to operate.

In this context, the SWIFT international funds clearing system was born.

3. Management: Daily operations are managed by the board of directors, which consists of 25 independent directors with a three-year term.

Among them, the United States, Belgium, France, Germany, and Switzerland each have two board seats.

For a long time, the chairman of SWIFT has basically been a representative of an American member unit.

4. Operation: Connecting more than 11,000 financial institutions in more than 200 countries and regions around the world.

Member banks transmit payment instructions through unified message specifications, and then the specific payment system completes the final electronic payment.

The remitter entrusts the bank to use SWIFT to instruct a bank (its branch or agent bank) at the export location to act as the remitting bank and pay a certain amount to the payee.

(2) Why the SWIFT payment system is controlled by the United States 1. The US dollar has the status of a global reserve currency. The US dollar is the world's most important investment, trade and settlement currency, accounting for more than 60% of the global reserve currency market share, and plays an important role in international payment and settlement.

China accounts for 40% (RMB is only 3.2%). Therefore, cross-border trade and investment fund settlement in most countries around the world are "monopolized" by the US dollar.

SWIFT's U.S. dollar transaction information reporting cannot exist independently from the New York Clearing House Interbank Payment System (CHIPS).

Moreover, many countries obtain U.S. dollar loans from the World Bank or the International Monetary Fund, but the loan agreements stipulate that these countries must repay in U.S. dollars and conduct payment and payment settlement through the U.S. CHIPS system and the SWIFT messaging system, making these

The country can only be firmly tied to the wheel of "US dollar hegemony", causing the entire country's economic development and trade and investment settlement to be affected and controlled by the US dollar.

2. The "911 Incident" provided the United States with an opportunity to control the SWIFT system. The most critical step for the United States to control the SWIFT system occurred after the "911 Incident". According to the "International Emergency Economic Rights Act", then US President George W. Bush authorized the Department of the Treasury's overseas assets

The control office can retrieve information on financial transactions and capital flows "related to terrorist activities" from SWIFT.

SWIFT had no choice but to give in and accept the United States' demands.

The United States can use SWIFT data to understand and combat the financing of terrorist organizations.

All international account information is strictly reviewed in the SWIFT system, making it difficult for terrorist organizations to successfully send or receive remittances.

These practices have indeed played a certain role. There have been no major terrorist attacks in the United States since 2001. However, they have also strengthened the United States' control over the SWIFT system, making SWIFT one of the tools for the United States to engage in political games against other countries in the future.

An important weapon of economic sanctions.

3. How does the United States control the SWIFT system? SWIFT is a neutral service organization located in Belgium and needs to comply with Belgian and EU laws.

Therefore, in principle, the United States cannot directly instruct SWIFT, but needs to persuade the European Union to formulate relevant laws.