If the United States decided to impose sanctions on Russian banks, then it could say that Swift violated those sanctions by continuing to let those banks use its system. the 2022 Law on Defense of Sovereignty of Ukrainethat Senate Democrats unveiled this month would authorize sanctions against specialized financial messaging service providers, such as Swift, but the Biden administration could also impose such sanctions without congressional approval.

Cutting off a country’s access to Swift is not unprecedented.

In 2012, Swift expelled up to 30 Iranian financial institutions, including its central bank, to comply with European Union sanctions that were passed in response to Iran’s disputed nuclear power program. Services were reconnected after the 2015 nuclear deal, then cut again in 2018 after the Trump administration pulled out of the pact and resumed sanctions.

How would Russia react to its withdrawal?

Russia has faced such threats before. In 2014, when Russia invaded and annexed Crimea, there were calls in Europe to kick Russia out of Swift. Dmitry A. Medvedev, then Russian Prime Minister, said at the time that such a move would be a “declaration of war”. According to the Carnegie Moscow Center, Russian forecasts at the time predicted that being cut off from Swift reduce the country’s gross domestic product by 5%.

Last week Nikolay Zhuravlev, Deputy Chairman of the Russian Federation Council, told the government news agency TASS that Russia’s withdrawal from Swift would also have economic consequences for European countries, which he said would not be able to receive imports of Russian oil, gas and metals due to Russia’s inability to receive foreign currencies.

Mr Smith, the former Treasury official, said the United States and Europe could look for ways to exempt certain Russian sectors, such as energy, from sanctions. However, moves to cut off the Russian economy could have unintended consequences, such as retaliation from Moscow, which could rattle global markets.

“They are not without their own playing cards,” he said.

A switch to Swift alternatives

The threat of being cut off from Swift may not be as severe as it once was.

Several countries, including Russia, have developed their own financial messaging systems which, although less sophisticated than Swift, could allow Russian financial firms to maintain communications with the world. Russia began developing its system in 2014 amid mounting US sanctions threats.