On 19 March 2019, the Russian State Duma passed in the first reading a bill contemplating the expansion of the so-called “SWIFT alternative” and its accessibility by foreign companies.
The “SWIFT alternative” is the system of financial messages exchange operated by the Russian Central Bank. Under the existing legislation, the Central Bank may provide such services to Russian banks and their clients which are Russian companies, as well as to foreign banks, international organizations and foreign central banks.
The proposed legislation aims to allow the Central Bank to provide access to “Russian SWIFT” directly to Russian and foreign companies, where the Russian clients will be provided with services on the basis of the Central Bank’s regulations, and foreign clients will enter into agreements for the services with the Central Bank.
The bill No. 558682-7 was passed only in the first reading. To become law, it needs to be considered in two subsequent readings by the State Duma, where further amendments may be introduced, then approved by the Council of the Federation and finally signed by the President.
The “SWIFT alternative” was developed by the Central Bank after fears that sanctions against Russia could lead to it being disconnected from SWIFT (ie the Society for Worldwide Interbank Financial Telecommunication).