G7 wants to jointly put pressure on banks that help Russia evade sanctions – Bloomberg

The Group of Seven countries and the European Union are looking into methods to put more pressure on banks that assist Russia in evading existing sanctions, which will be one of the issues at the G7 summit in mid-June.

Source: Bloomberg, as reported by European Pravda 

Details: Some G7 countries are considering sanctions against third-country financial institutions that utilise SPFS, a system comparable to SWIFT for delivering financial messages to Russia's Central Bank, to avoid trade restrictions.

According to Bloomberg’s sources, the SPFS system is used by over 150 foreign banks in 20 countries, including China, Belarus, Armenia, Tajikistan and Kazakhstan, one of the sources said. The use of SPFS roughly tripled between last year and 2022.

Sanctions against this system were proposed by the European Commission, according to Bloomberg. The EU hopes to reach an agreement on the package before the G7 gathering, but several EU member states have opposed a blanket ban on SPFS, citing fears that such a measure would jeopardise legitimate transactions and affect relations with third countries.

Alternative measures that would limit Russia's ability to avoid sanctions include sanctions on individual banks that assist Moscow, as well as stricter requirements for firms to audit their subsidiaries and supply chains.

Bloomberg writes that discussions will continue until the G7 summit in Italy, where leaders hope to agree on a set of measures to properly implement the sanctions imposed on Russia for its war against Ukraine.

At the end of last year, US President Joe Biden signed a decree on economic measures against foreign financial institutions involved in supplying Russia with sanctioned military goods. This has had a huge impact on cash flows between Russia and nations such Türkiye, the United Arab Emirates, and Kazakhstan.

Separately, the G7 is aiming to secure a political agreement on how to use income from Russia's frozen sovereign assets to support Ukraine.

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