This is CBSI in the world. I'm John Batsow.

With John Hardy, the deputy director of the Russia program at the foundation for the

defensive democracy, he and his colleague Peter Durand published within these days,

Rubel Rumble, offensive and defensive measures to defeat Russia in the economic domain.

It's a well-written and comprehensive look at the sanctions regime in the second year

of war. We've spoken of the economic sanctions to achieve the do with energy.

Now we turn to the financial sanctions which require some definitions. John, what is Swift

and what is SPFS?

Right. So Swift is a really important part of the international financial system, really

part of the plumbing that allows banks to move money across the world seamlessly. So Russia

has built its alternative to Swift called SPFS, so developing it back in 2014 after the

initial round of Western sanctions following the annexation of Crimea. I think it was stood

up to somewhere around 2017. Russia is trying to, especially since 2022, when these much

harsher sanctions were put in place, Russia has tried to expand the use of it abroad, again,

as an alternative to Swift. The United States and its Western allies have cut a large number

of Russian banks off of Swift, which again impedes their ability to operate in the financial

sector. So what we argue in the report is we need to target this alternative so Russia

cannot use it as a go-around. So one idea could be, say, set a certain threshold for financial

capitalization, where if you're above that threshold and use SPFS in your international

financial institution, you're subject to US sanctions. That's just one idea. I think

there are a lot of ways to attack this problem, but the basic idea is that we need to prevent

Russia from using this as a way to circumvent sanctions.

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