The European Union (EU) has proposed to disconnect around 15 Russian banks from the SWIFT international banking system as part of the EU’s 16th sanctions package, Bloomberg reported, citing unnamed sources.
The proposed package also allegedly includes a gradual ban on Russian aluminum imports and restrictions on more than 70 ships in Russia’s “shadow fleet.” These ships are accused of transporting Russian oil at prices above the $60-per-barrel cap set by Western countries.
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However, the sanctions package must be approved by all EU member states before it can take effect. This could be challenging since Hungary – Russia’s closest ally in the EU – has previously resisted extending sanctions against the Kremlin.
The discussions come just before the third anniversary of Russia’s invasion of Ukraine in February 2022.
This is not the first time Russian banks have been targeted. Shortly after the war began, major Russian banks were cut off from SWIFT, a global system used for international financial transactions. In response, Russia developed its own system, called SPFS, for domestic and some international transactions.
In 2024, the EU took further steps by banning European companies from connecting to SPFS and restricting transactions with third countries using the system. These measures were part of the 14th sanctions package.
On Jan. 27, EU foreign ministers agreed to extend existing sanctions against Russia after Hungary finally agreed, ending weeks of stalling.
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The EU’s 27 member states must unanimously approve extending the sanctions every six months, with the next deadline looming on Jan. 31. Hungary frustrated other members by refusing to approve the latest extension.
Initially, Budapest claimed it wanted to wait for new US President Donald Trump’s inauguration to move forward. After that, Prime Minister Viktor Orban demanded that Brussels push Ukraine to reopen a gas pipeline to Central Europe.
To win Hungary over, the European Commission issued a statement promising to involve Hungary and Slovakia in talks with Kyiv about gas supplies to Europe. The EU also said it would “approach Ukraine to request assurances regarding the maintenance of oil pipeline transfers to the EU.”
Ukraine let a gas transit agreement with Russia lapse on New Year’s Day to cut off funds Moscow uses to finance its war, which started in February 2022.
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