The United States and its Western allies will impose sanctions on the Russian central bank and remove some Russian banks from the Swift global payment system, in the toughest response to the invasion of Ukraine.

In a joint statement, the United States, United Kingdom, Canada, France, Germany, Italy and the European Commission said they would “prevent Russia’s central bank from deploying its international reserves in a manner undermine the impact of our sanctions”.

“We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin,” they added.

The group said it would take more action against the facilitators of the invasion, including limiting the sale of “golden passports” that “enable wealthy Russians connected to the Russian government to become citizens of our countries and access to our financial systems.

Ursula von der Leyen said she would propose to EU leaders to “cripple the assets of the Russian central bank” in order to freeze its transactions and prevent it from liquidating its assets.

The joint action is the toughest measure imposed on Russia following its invasion of Ukraine. The United States has previously imposed sanctions only on the central banks of Iran, Venezuela and North Korea.

A senior U.S. banking official said imposing central bank sanctions was one of several options the Biden administration had discussed with major U.S. financial groups in recent weeks to ensure banks were prepared for this eventuality.

Josh Lipsky, a former IMF adviser currently on the Atlantic Council think tank, said earlier that imposing US sanctions on Russia’s central bank would be an “extraordinarily important and damaging step for the Russian economy. “.

“A G20 central bank has never been sanctioned before. It’s not Iran. It’s not Venezuela. So cutting off their central bank from the international financial system, or at least the economy of dollar and euro, is potentially a massively destabilizing move,” Lipsky said.

Edward Fishman, a former US official currently at the Center for a New American Security, said it would deal a “devastating blow” to Russia’s economy that would overshadow the significance of a ban on Swift.

“If you added the Russian central bank to the SDN list, that would be the most impactful sanction you could apply to Russia, and you could do it with the stroke of a pen,” he said. “It would render a significant portion of their foreign exchange reserves unusable overnight.”

A ban would prohibit U.S. entities from transacting with the central bank. This would mean that everyone in the world would be “skiddy about moving assets on behalf of the Russian central bank,” Fishman explained.

EU resistance to the ejection of Russian banks from Swift has gradually eroded, with Italy saying it would not oppose such a move. Italian Prime Minister Mario Draghi told Ukrainian President Volodymyr Zelensky during a call on Saturday that Rome would fully support the EU’s work on sanctions against Russia, “including those encompassing Swift.”

After also speaking to Zelensky on Saturday, British Prime Minister Boris Johnson, who has lobbied for the move against Moscow, said the two leaders “welcome the increased willingness to act to get Russia out of Swift.”

Eliminating Russian banks from Swift will make it harder for Russians to transact across borders, which will put more pressure on the country’s financial system.

Swift, a Belgian company owned by more than 2,000 banks and financial institutions, provides secure messaging services for billions of dollars in bank-to-bank payments. She has found herself in the spotlight during international crises, including over Iran’s nuclear program. In 2012, and then again in 2018, he was pressured into excluding sanctioned Iranian banks.

Additional reporting by Gary Silverman in New York, Jim Pickard in London, Valentina Pop in Brussels and Silvia Sciorilli Borrelli in Milan