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Moving money internationally

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  1. skybrian
    From the article: [...] [...] [...]

    From the article:

    Importantly: SWIFT is not actually co-extensive with international money movement. In the first place, it doesn't actually do anything directly to money. Money doesn't travel over SWIFT any more than it travels over napkins, though each could potentially contain an instruction about money that a bank might choose to implement.

    SWIFT does not even monopolize the thing that everyone assumes it monopolizes. There is a document in a binder in Tokyo which describes “How to move money to the U.S. if SWIFT is down” and it does not say “Pause the Japanese economy until SWIFT gets their #%()#% together.” [Mitsubishi UFJ Bank] knows the phone numbers for the U.S. banks holding billions of dollars of their money and can transact with them in any of the ways that you’d expect a bank to make available to a customer with billions of dollars deposited.


    A recurring theme for this column is that banks are expected, in return for guaranteed monopolization of some lucrative franchises, to act as policy arms for the governments they are subject to.

    SWIFT is, theoretically, a Belgian cooperative. The Federal Reserve is also, theoretically, a joint-stock company owned by member banks and not at all part of the United States government. These are… consensual fictions.


    Specifically, it communicates that Something Has Changed and that Russian institutional money, specifically “oligarch” money, is now tainted, and not in the benignly ignored fashion it has been for most of the last few decades.

    Read: “We will with absolute certainty hand out billions of dollars of fines stochastically over the next ten years. You can minimize how many hit your institution by successfully intuiting who is on the Bad Risks list. We will be sharply less tolerant of ‘Cyprus is an EU country and so banked customers in it are per se low risk’, ‘lots of people buy real estate in London and we couldn’t possibly inquire about all of them’, and things which we have previously turned a blind eye to, and we will probably lie about having turned a blind eye to that, and you will, too, if you know what is good for you.”


    [W]hile the global financial system and the governments giving them instructions have not actually banned the usage of oligarchs’ wealth prior to now, they have already given many ordinary Russians (and ordinary Ukranians!) severe difficulties doing things we expect to be utterly routine for law-abiding members of society.

    Without divulging any professional confidences, in the wake of the 2014 invasion of the Crimean Peninsula many U.S. banks decided to stop serving customers with Ukrainian passports. No one explicitly made the decision “Your nation got invaded, so you should have less access to financial systems half a world away. This is a natural and just outcome in a democratic society.”

    It flowed indirectly through “The Crimea now poses a heightened risk of money laundering”, “We lack the ability to discriminate between the Crimea and the rest of Ukraine”, “We care a lot more about not facilitating money laundering than we do about our infinitesimal Ukraine business so Ukraine is going on the High Risk Country list”, “Sorry, you have citizenship from the High Risk Country list, accordingly I’m not allowed to open this account for you. This is a commercial decision of the bank and will not be reversed.”

    Maddeningly, no one—not the regulators, not Compliance, not the front-line employee delivering the decision—believes they are accountable for this result! Which happened! Tens! Of! Thousands! Of! Times!

    1 vote