The European Union is considering sanctions on foreign banks that use Russia’s alternative to the SWIFT interbank messaging system, according to a report by Euractiv. This move is part of the EU’s 19th sanctions package against Moscow, with France and Germany leading the proposal. The goal is to target countries that help Russia bypass existing restrictions.

Russia has been promoting its System for Transfer of Financial Messages (SPFS) as a reliable alternative to SWIFT since many of its financial institutions were cut off from the Western network in 2022. The SPFS ensures secure transfer of financial messages between banks inside and outside the country. This system has become a key workaround for Russian and non-Russian banks to maintain trade flows despite Western efforts to isolate Moscow.

In June 2024, the EU banned its banks operating outside Russia from connecting to SPFS or carrying out transactions via the system. Despite this, 177 foreign entities across 24 countries were connected to SPFS as of early 2025, according to the Russian central bank. Moscow has accelerated efforts to move away from SWIFT by trading with international partners in their national currencies, a trend supported by BRICS members.

The EU’s proposed sanctions aim to strike at the “deeper structures” of Russia’s financial and logistics networks. Russia has denounced Western sanctions as illegal, arguing they have failed to destabilize the economy or isolate the country from the global financial system. Instead, Moscow claims the sanctions have backfired on the states that imposed them.

The potential sanctions on foreign banks using SPFS could further escalate tensions between the EU and Russia. The EU’s actions are part of a broader effort to restrict Russia’s access to international financial systems. As the situation continues to evolve, the impact of these sanctions on global trade and financial networks remains to be seen.