SWIFT Cuts Off Sanctioned Iranian Banks From Global Payment System
SWIFT (the Society for Worldwide Interbank Financial Telecommunication) said on 15 March that it had been instructed to disconnect Iranian banks hit by European sanctions from its electronic payment system. The move by SWIFT, which operates the world’s biggest payment platform covering over 10,000 financial institutions operating in 210 countries, comes after an EU Council decision of the same date. The EU Council prohibited companies from providing specialized financial messaging services to blacklisted Iranian banks in the hope that further pressure will push Iran to end its nuclear program.
Given that SWIFT is almost universally used by financial institutions this move is expected to have a huge impact on international money transfers by Iranian businesses, effectively cutting them off from the rest of the world. The disconnection was to become effective on 17 March at 16.00 Greenwich Mean Time. SWIFT is incorporated under Belgian law and has to comply with this decision as confirmed by the Belgium Treasury. “This EU decision forces SWIFT to take action” said Lázaro Campos, CEO of SWIFT. “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.”
SWIFT said it remains in full compliance with sanctions in the multiple jurisdictions in which it operates, and has received confirmation of this from regulatory authorities. As a global provider of secure messaging services, it stressed that it has no involvement in or control over the underlying financial transactions that are contained in the messages of its member banks. SWIFT handles payments worth over $6 trillion per year. The member-owned cooperative enables users to exchange automated, standardized financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. It also plays a role in bringing the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.
Copyright MEES 2012.
