EU weighs cutting 20 lenders from SWIFT under new Russia sanctions

By Alberto Nardelli and Ewa Krukowska

 

The European Union is considering cutting more than 20 banks from SWIFT, the international payments system, as well as lowering a price cap on Russian oil and banning the Nord Stream gas pipelines as part of a new sanctions package that aims to increase pressure on Moscow to end its war against Ukraine.

 

The European Commission is consulting member states over the plans, according to people familiar with the matter. A decision on timing of potential restrictions has yet to be taken, said the people, who spoke on condition of anonymity to discuss private deliberations. EU sanctions require the backing of all member states, and could change before they’re formally proposed and adopted.

 

The EU is also weighing additional transaction bans on about two dozen banks and some €2.5 billion ($2.84 billion) worth of fresh trade restrictions as it seeks to further curtail Russia’s revenues and ability to get its hands on the technology needed to make weapons. 

 

As part of the package under the discussion, the bloc’s executive arm is also planning to propose lowering the Group of Seven oil price cap to about $45, the people said. 

 

That move would likely require backing from the US. The price threshold, which bans G-7 service providers from transporting and dealing with crude sold above the cap, is currently set at $60. G-7 finance ministers failed to reach an agreement to bring the cap down at a meeting in Banff, Canada, this week.

 

The discussions come as US President Donald Trump has urged Moscow and Kyiv to hold direct talks over a ceasefire and peace agreement. Trump has so far shied away from imposing new sanctions on Russia, despite threatening to do so several times. Sanctions introduced under President Joe Biden remain in place.

 

Crucially, the EU’s plan to sanction the Nord Stream pipelines already has Germany’s support. For German Chancellor Friedrich Merz, who said in Rome last week that he supports the Commission’s proposal “to start work on European measures against the Nord Stream 2 pipelines,” a key hope is that sanctions could temper debates at home about reviving the projects, Bloomberg previously reported.

 

Rumors of a potential revival of the pipeline project have intensified as Trump pushed to broker peace between Russia and Ukraine. Even without a formal ban, activating Nord Stream 2 — which was built but never certified by Germany, and was partially damaged by explosions in 2022 — was unlikely to happen any time soon.

 

Sanctions would lend weight to Europe’s position that it doesn’t want any meaningful return of Russian pipeline flows. A ban will also protect Berlin from dealing with any potential US or Russian pressure on its own. Separately, the bloc is planning to phase out Russian fossil fuels by the end of 2027.

 

Elsewhere, the EU is looking to expand its sanctions on Russia’s shadow fleet of oil tankers, and is considering further restrictions on lenders seen to be aiding Moscow’s war efforts as well as the Russian foreign direct investment fund, said the people.

 

The bloc also wants to include clauses in its next sanctions package — which would be the EU’s 18th since Russia’s full-scale invasion of Ukraine in 2022 — to protect European firms from arbitration under bilateral investment treaties, the people added.