SWIFT cuts financial ties with Iran over EU sanctions
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) says it has decided to discontinue services to Iranian banks which are subject to financial sanctions imposed by the European Union.
“Disconnecting banks is an extraordinary and unprecedented step for SWIFT. It is a direct result of international and multilateral action to intensify financial sanctions against Iran,” the Associated Press quoted SWIFT CEO Lazaro Campos as saying on Thursday.
The Financial Times described the service as “one of the key bits of plumbing in the world’s interbank payment systems,” adding that 30 Iranian banks will be cut off from the service as of Saturday, March 17.
The US and EU charge Iran with pursuing military goals under the cover of its civil nuclear energy program and have imposed several rounds of international and unilateral sanctions against Iran to force the country give up its nuclear energy program.
On January 23, the EU foreign ministers approved new sanctions on Iran’s financial and oil sectors, which ban member countries from importing Iranian crude or dealing with its central bank.
Experts believe that SWIFT’s new action is meant to fully enforce EU sanctions, as global financial transactions are impossible without using SWIFT.
Despite tightening sanctions, some analysts have noted that Iran is still able to skirt the sanctions in a few ways. The country, they say, may exchange oil for cash, gold or other commodities directly. Also, Iranian banks that have not been targeted by EU sanctions can still sell oil.
“Throughout the history of the oil trade, someone always gets around trade embargoes one way or another,” said Jim Ritterbusch, a veteran oil trader and analyst.
SWIFT is a clearing system, which oversees the network used by most of the world’s largest banks to conduct financial wire transfers.
SWIFT handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries. It enables users to exchange financial information securely and reliably, thereby lowering costs and reducing risks.
Established in 1973, the system has been overseen by major central banks, including the US Federal Reserve and the European Central Bank.
- SWIFT financial service cuts Iran off – RT (rt.com)
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