The United States, Britain, Europe and Canada agreed on Saturday to block Russia's access to the international payments system of the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the largest payments network connecting thousands of financial institutions around the world.
The latest sanctions are part of another round of sanctions against Moscow for continuing its attacks on Ukraine.
In a joint statement, the US and Western countries announced that the move also includes restrictions on Russia's central bank's international reserves, which will be implemented in the coming days. The West and the US also pledged to take further action.
"We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin," wrote the leaders of the European Commission, France, Germany, Italy, Great Britain, Canada and the United States.
"Even beyond the actions we announced today, we are ready to take further action to hold Russia accountable for its attacks on Ukraine," they added.
The move comes after the United States and its allies imposed sanctions this week on major Russian banks, as well as on Russian President Vladimir Putin himself as Moscow forces pushed into the heart of Ukraine towards Kyiv.
"As Russian forces unleashed their attacks on Kyiv and other Ukrainian cities, we decided to continue imposing massive costs on Russia. These costs would further isolate Russia from our international financial system and our economy," said European Commission President Ursula von der Leyen.
According to von der Leyen, blocking Russian banks from the SWIFT system would stop them from conducting most of their financial transactions worldwide and effectively block Russian exports and imports.
"Sanctions will also stop Russia from using its war chest, cripple its central bank assets, freeze its transactions and make it impossible for the central bank to liquidate its assets," von der Leyen said.
It was not immediately clear which Russian banks would be removed from SWIFT, but von der Leyen said the move would ensure selected Russian banks were cut off from the international financial system.
Doing so would be detrimental to their ability to operate globally. The Allies also pledged to limit the sale of citizenship through so-called 'gold passports' used by some of Russia's wealthy to gain residency in Western countries and access to their financial systems.
EU foreign ministers will discuss the sanctions package at a virtual meeting on Sunday evening, the fourth time they have come together in a week. In Britain, Prime Minister Boris Johnson said decisive action by allies would shut Russia out of the global financial system.
