SWIFT Bans Have Impact on the Rich and the Poor

ACORN International Ideas and Issues

            Pearl River     It seems almost unbelievable to be reading about a land war in Europe, as Russia invades Ukraine.  It’s so 20th century and one-hundred years ago.  Tanks rolling and threats of nuclear weapons seem so Cold War again.  Sanctions seem so other worldly as well, as we grapple with the news and try to understand global finance, supply chains, various bans, and whether they will really work.   Trump, still seeing Putin as his bro-buddy, refers to them as “$2 sanctions.”  A dozen years ago, 30% of the world’s population was living under some form of sanctions, so maybe he has a point that people are inured to the pain.

Then I read about the number of countries that were barring Russian banks from using SWIFT, the Society for Worldwide International Financial Transactions, and sanctions took on a more personal meaning to me.  TheWashington Post offered a succinct definition of the broad range of what this means

It is a messaging network that connects banks around the world and is considered the backbone of international finance. The Belgian-based consortium links more than 11,000 financial institutions operating in more than 200 countries and territories, acting as a critical hub to enable international payments. Last year, the system averaged 42 million messages a day, including orders and confirmations for payments, trades and currency exchanges. More than 1 percent of those messages are thought to involve Russian payments.

              That may sound like blah-blah-blah to you, but it’s more far reaching than perhaps you can imagine.  ACORN’s ability to organize and maintain an international organization is largely possible over the last several decades because of the spread of the internet, cheap communications systems like Skype and now Zoom, relatively cheap and fast air traffic, and the fact that English has become lingua franca in the modern world.  The other pillar that undergirds our organizing is the modern banking system giving us the ability to transfer subsistence resources to support our organizers in Peru, Honduras, India, Kenya, Nigeria and similar countries.  The key that unlocks our ability to move money from our ACORN bank accounts with Capital One to our organizers and affiliate organizations in our international federation is, yes, you guessed it, the SWIFT number attached to their local accounts.  Without it, moving money would be almost impossible, if not totally impossible.

That’s us, but it’s also will impact individual Russian families as well as the Russian oligarchs. A Russian ex-pat family trying to get money to family members in Russia, is going to have to hustle and bustle to try to find another way to get critical cash remittances through these sanctions and bans.  The Western alliance countries may only be talking about how it impacts the billionaires who own ball teams, condos in New York City, and fancy houses in London’s Kensington and Mayfair, but they are also counting on how much it hurts regular Russian families who depend on remittances to put pressure on Putin.  The pain there will be felt SWIFTly.