By Matt Scuffham, David Henry and Pete Schroeder

NEW YORK/WASHINGTON (Reuters) – Senior management and compliance teams at major banks were working around the clock this weekend to understand the raft of new sanctions imposed on Russia and its banking system in the wake of the country’s invasion of Ukraine.

Banks were scrambling to ensure they understood the full implications of the restrictions, including the banning of certain Russian lenders from the SWIFT international payment system, sources at major global banks said. The SWIFT measure was announced Saturday without naming the affected Russian banks, leaving the sector waiting for details.

With global financial markets set to open within hours, bankers described staff working on overdrive to apply the sanctions, including frantic calls to governments and regulators to fill in gaps in knowledge.

One European bank source said it was imploring authorities for more time to make system changes for full compliance in what the source described as a fast-moving, fluid situation.

While global banks have extensive experience with sanctions and have invested heavily in compliance programs in recent years, the scale of the restrictions imposed on a major country such as Russia is unprecedented, said industry sources.

While banks in Iran and North Korea have been kicked off SWIFT before, their banks are not significant global trade participants, those sources said.

Banks generally exercise extreme caution and would do so until the picture is clear, a source at one U.S. bank said, noting that it was prioritizing changes that needed immediate implementation.

Goldman Sachs, Morgan Stanley, Citigroup and JPMorgan Chase declined to comment. Bank of America did not respond to requests for comment.

SANCTIONS SKIRTING

U.S. and European banks have had to implement sanctions involving Russian entities before, as in 2014 after Russia’s annexation of Crimea.

Many have maintained strong business links with the country, earning millions of dollars from facilitating trade, and advising Russian companies on mergers and acquisitions and raising cash from international markets. That business is now threatened, including the investment banking fees that many U.S. banks earn.

Citigroup has a retail banking operation in Russia that it has been trying to sell since April.

The newest U.S. restrictions announced in the last week complicate the picture. These include banning banks from having correspondent banking relationships with Sberbank – preventing Russia’s largest lender from making payments and facilitating trade with other banks, and freezing all U.S. assets belonging to VTB and its 20 subsidiaries and forbidding dealings with them.

One of the biggest concerns of U.S. and European banks is the risk of inadvertently doing business with Russian-sanctioned entities via shell companies that may not be obviously connected, the banking sources said.

Banks have extensive Know Your Customer programs, which require lenders to make full checks on parties they do business with. And, since the imposition of sanctions in 2014, U.S. banks have grown more skilled at ascertaining the true beneficial ownership of assets.

(Reporting by Matt Scuffham, David Henry, Megan Davies, Michelle Price, Elizabeth Dilts Marshall and Pete Schroeder; Writing by David French; editing by Megan Davies and Richard Chang)