By JOSH BOAK, FA­TI­MA HUS­SEIN and KEN SWEET | AS­SO­CI­AT­ED PRESS

WASH­ING­TON (AP) — U.S. and Eu­ro­pean of­fi­cials are hold­ing one key fi­nan­cial sanc­tion against Rus­sia in re­serve, choos­ing not to boot Rus­sia off SWIFT, the dom­i­nant sys­tem for glob­al fi­nan­cial trans­ac­tions.

The Russ­ian in­va­sion of Ukraine caused a bar­rage of new fi­nan­cial sanc­tions Thurs­day. The sanc­tions are meant to iso­late, pun­ish and im­pov­er­ish Rus­sia in the long term. Pres­i­dent Joe Biden an­nounced re­stric­tions on ex­ports to Rus­sia and sanc­tions against Russ­ian banks and state-con­trolled com­pa­nies.

But Biden point­ed­ly played down the need to block Rus­sia from SWIFT, say­ing that while it’s “al­ways” still an op­tion, “right now that’s not the po­si­tion that the rest of Eu­rope wish­es to take.” He al­so sug­gest­ed the sanc­tions be­ing put in place would have more teeth.

“The sanc­tions we’ve im­posed ex­ceed SWIFT,” Biden said in re­sponse to a ques­tion Thurs­day. “Let’s have a con­ver­sa­tion in an­oth­er month or so to see if they’re work­ing.”

Still, some Eu­ro­pean lead­ers, in­clud­ing in the Unit­ed King­dom, fa­vor tak­ing the ad­di­tion­al step of block­ing Rus­sia from SWIFT, the Bel­gium-head­quar­tered con­sor­tium used by banks and oth­er fi­nan­cial in­sti­tu­tions that serves as a key com­mu­ni­ca­tions line for com­merce world­wide. The SWIFT sys­tem av­er­aged 42 mil­lion mes­sages dai­ly last year to en­able pay­ments. The name is an acronym for the So­ci­ety for World­wide In­ter­bank Fi­nan­cial Telecom­mu­ni­ca­tions, and about half of all high-val­ue pay­ments that cross na­tion­al bor­ders go through its plat­form.

Ukraine has sought for Rus­sia to be ex­clud­ed from SWIFT, but sev­er­al Eu­ro­pean lead­ers would pre­fer to stay pa­tient be­cause a ban could make in­ter­na­tion­al trade more dif­fi­cult and hurt their economies.

“A num­ber of coun­tries are hes­i­tant since it has se­ri­ous con­se­quences for them­selves,” said Dutch Prime Min­is­ter Mark Rutte, who be­lieves a ban should be a last re­sort.

The British gov­ern­ment says Prime Min­is­ter Boris John­son pushed at a vir­tu­al meet­ing of the Group of Sev­en world lead­ers Thurs­day for Rus­sia to be kicked out of SWIFT. It said there was “no push­back” but it was agreed that more dis­cus­sion was need­ed. U.K. of­fi­cials would not con­firm Ger­many was re­sist­ing.

U.S. law­mak­ers have called on Biden to de­ploy every avail­able fi­nan­cial sanc­tion, with Sen­ate Re­pub­li­can Leader Mitch Mc­Connell say­ing Thurs­day that Amer­i­ca should “ratch­et the sanc­tions all the way up. Don’t hold any back. Every sin­gle avail­able tough sanc­tion should be em­ployed and should be em­ployed now.”

But Sen. Jim Risch of Ida­ho, the top Re­pub­li­can on the Sen­ate For­eign Re­la­tions Com­mit­tee, said the SWIFT ban would be com­pli­cat­ed and time-con­sum­ing in part be­cause the U.S. doesn’t have con­trol over the de­ci­sion.

The prob­lem is that ban­ning Rus­sia from SWIFT might not cut it off from the glob­al econ­o­my as clean­ly as pro­po­nents think. Al­so, there could be blow­back in the form of slow­er in­ter­na­tion­al growth. And ri­val mes­sag­ing sys­tems could gain users in ways that erode the pow­er of the U.S. dol­lar — all of which has left SWIFT as a sanc­tion wait­ing to be de­ployed.

“It’s a com­mu­ni­ca­tions plat­form, not a fi­nan­cial pay­ments sys­tem,” said Adam Smith, a lawyer who worked in the Oba­ma ad­min­is­tra­tion. “If you re­move Rus­sia from SWIFT, you’re re­mov­ing them from a key artery of fi­nance, but they can use pre-SWIFT tools like tele­phone, telex or email to en­gage in bank-to-bank trans­ac­tions.”

The oth­er risk is that coun­tries could mi­grate their in­sti­tu­tions to plat­forms oth­er than SWIFT, such as a sys­tem de­vel­oped by Chi­na. This would in­crease the fric­tion in glob­al com­merce — hurt­ing growth — and make it hard­er to mon­i­tor the fi­nances of ter­ror­ist groups.

“By politi­ciz­ing SWIFT, you give in­cen­tive for oth­ers to de­vel­op al­ter­na­tives,” said Bri­an O’Toole, a se­nior fel­low at the At­lantic Coun­cil and for­mer Trea­sury of­fi­cial. “SWIFT al­so is an im­por­tant part­ner in U.S.-Eu­ro­pean coun­tert­er­ror­ism ef­forts. It shares da­ta with U.S. Trea­sury re­lat­ed to coun­tert­er­ror­ism is­sues that has proven to be enor­mous­ly valu­able.”

The sanc­tions an­nounced Thurs­day would still ac­com­plish much of what would hap­pen if Rus­sia lost ac­cess to SWIFT, said Clay Low­ery of the In­sti­tute of In­ter­na­tion­al Fi­nance.

“Cut­ting off these fi­nan­cial in­sti­tu­tions from uti­liz­ing the dol­lar, eu­ro, pound ster­ling is still a pret­ty sig­nif­i­cant step,” Low­ery said. “You’re re­al­ly hav­ing the same im­pact on cer­tain sub­sec­tions of the Russ­ian econ­o­my through sanc­tions.”

Iran was blocked from the SWIFT sys­tem in 2014 be­cause of its nu­clear pro­gram. In 2019, then-Russ­ian Prime Min­is­ter Dmit­ry Medvedev said los­ing ac­cess to SWIFT would be akin to a de­c­la­ra­tion of war against Rus­sia. The state­ment by Medvedev is a sign that Rus­sia viewed the plat­form as a vul­ner­a­bil­i­ty and de­vel­oped workarounds to lim­it any eco­nom­ic dam­age.

“I think it will be harm­ful in the im­me­di­ate term and psy­cho­log­i­cal as well, but I’m not sure it’ll im­pact the econ­o­my in ways that make it worth­while,” Smith said.

Rus­sia has al­ready pre­pared for ways to evade sanc­tions, in­clud­ing those im­posed this week, ex­perts say.

Ari Red­bord, a for­mer Trea­sury se­nior ad­vis­er, said he ex­pects Rus­sia’s lead­er­ship to by­pass fi­nan­cial penal­ties that lim­it its abil­i­ty to en­gage in the glob­al fi­nan­cial sys­tem through the in­creased use of cryp­tocur­ren­cy.

He said this is a risk “es­pe­cial­ly when there are ac­tors like Iran, Chi­na and North Ko­rea” that will con­tin­ue to trade with Rus­sia out­side of the for­mal fi­nan­cial sys­tem, Red­bord said.

“If Russ­ian banks are en­tire­ly cut off from the U.S. and Eu­ro­pean fi­nan­cial sys­tem, that will be very de­bil­i­tat­ing to those banks and the Russ­ian econ­o­my,” he said. But the Russ­ian gov­ern­ment will use al­ter­na­tive means to trade with coun­tries “even if there are de­bil­i­tat­ing” sanc­tions from the Eu­ro­pean Union and U.S.

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As­so­ci­at­ed Press writ­ers Jill Law­less in Lon­don and Lisa Mas­caro in Wash­ing­ton con­tributed to this re­port.