EU targets foreign banks using Russia’s SWIFT alternative

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 proposal, led by France and Germany, is part of the EU’s 19th sanctions package against Moscow and aims 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 the secure transfer of financial messages between banks inside and outside the country and 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. Nevertheless, the Russian central bank reported that, as of early 2025, 177 foreign entities across 24 countries remained connected to SPFS. Moscow has accelerated its 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 that they have failed to destabilize the economy or isolate the country from the global financial system, and claims the measures have backfired on the states that imposed them. Potential sanctions on foreign banks using SPFS could further escalate tensions between the EU and Russia.

These actions are part of a broader EU effort to restrict Russia’s access to international financial systems. As the situation evolves, the impact of the sanctions on global trade and financial networks remains uncertain.