The European Union, United States and their allies have decided to cut off a number of Russian banks from the main international payment system, Swift.
The assets of Russia’s central bank will also be frozen, restricting Russia’s ability to access its overseas resources.
A joint statement said the motive is to “further isolate Russia from the international financial system”.
Russia is heavily reliant on the Swift system for its key oil and gas exports.
These sanctions are the toughest measures compelled to date on Russia over its invasion of Ukraine.
Swift, or the “Society for Worldwide Interbank Financial Telecommunication”, is a secure messaging system that makes fast, cross-border payments possible, enabling international trade.
Established in Belgium, it facilitates transactions between more than 11,000 banks and financial institutions across the globe.
It plays a key function in boosting the global economy, but has no authority to make sanction decisions itself.
According to a German spokesman, the banks affected are “all those already sanctioned by the international community, as well as other institutions, if necessary”
Eliminating banks from Swift is considered to be a drastic curb because almost all banks utilize the system.
The measures were approved by the US, UK, Europe and Canada.