disconnection from SWIFT and freezing of assets are the most painful sanctions – Kommersant

Chairman of the Central Bank (CB) Elvira Nabiullina, commenting on the sanctions imposed against the Russian Federation, called the freezing of assets of private Russian investors a very painful topic. She also considers sanctions affecting international payments a problem.

As the head of the Central Bank said in an interview RBC, the regulator has been assessing the risks of tightening sanctions since 2014. According to her, large banks that were subject to restrictions “were largely prepared” for them. “Disconnection from SWIFT has been a threat since 2014, so we were building a national payment infrastructure. We diversified our reserves and increased the share of yuan and gold,” says Ms. Nabiullina.

According to her, the freezing of the Central Bank’s reserves was “a very negative signal for all central banks, because it is a violation of the basic principles of reserve security.” Elvira Nabiullina assured that the regulator was helped by “the floating exchange rate and currency restrictions, which we adopted quite strict” in the spring of 2022.

“The problem, that’s exactly the problem, has become international payments, they are still a problem, although we are trying to solve it. Of course, the blocking and freezing of assets of private individuals – millions of people who were not subject to sanctions, but ended up with frozen assets – became a very painful topic,” the head of the Central Bank noted.

She did not rule out tightening anti-Russian sanctions and emphasized that we must be prepared for this. “We were able to respond to the main challenges, if we talk about the financial sector, but there are also problems in the financial sector that have not been fully resolved, including cross-border payments. Yes, chains are being built, they are constantly changing, but this still remains a problem for many enterprises,” added Ms. Nabiullina.

Due to sanctions, about $300 billion of Russian reserves were frozen. By according to analysts, The West managed to find only $80–100 billion of it. The European Union is discussing the confiscation of frozen Russian assets and their transfer to Ukraine. Financial Times wrotethat the EU plans to collect up to €15 billion ($16.4 billion) for Kyiv from income from the assets of the Central Bank of the Russian Federation. According to the publication, the United States offer transfer frozen assets of the Russian Federation to Ukraine in tranches.

Laura Keffer