01162018Tue

US presses EU to close SWIFT network to Iran

AFP: The United States is urging the European Union to block Iranian banks' access to SWIFT, the global interbank transfer network, to step up pressure on Tehran, a US official said Thursday.
WASHINGTON (AFP) — The United States is urging the European Union to block Iranian banks' access to SWIFT, the global interbank transfer network, to step up pressure on Tehran, a US official said Thursday.

The US Treasury's sanctions chief David Cohen raised the issue in talks in Brussels earlier this month, the official said, as Washington, Europe and their allies seek to isolate Iran to force it to halt its alleged nuclear weapons program.

"While there he discussed the issue of SWIFT providing services to designated Iranian banks and urged the EU to take action on the issue," said the official, who spoke on condition of anonymity.

Belgium-based SWIFT -- the Society for Worldwide Interbank Financial Telecommunication -- is a cooperative of more than 9,000 financial institutions that serves as the main conduit for inter-bank transactions around the world.

It is overseen directly by the Group of 10 central banks, including the US Federal Reserve and the European Central Bank.

SWIFT said earlier this month that it "complies fully with all applicable sanctions laws of the multiple jurisdictions in which we operate and we will continue to do so," without making any reference to Iran.

The organization said in a February 2 statement that it had been "a vital instrument" in fighting terrorist financing.

But it added that "SWIFT remains committed to maintaining its role as a neutral global financial communications network, as well as continuing to comply with all relevant sanctions laws."

The central bank of sanctions-hit Iran in late January acted to enforce a single exchange rate after a dramatic slide in the value of the Iranian rial on the open market amid escalating Western banking sanctions.

Sanctions imposed over Iran's alleged nuclear weapons program sharply reduced its foreign reserves, forcing the central bank in November to halt its policy of massive injections of dollars into the open market to support the rial.

Evicting Iran from SWIFT would further cripple the country's financial flows but could shock the global financial system at a time of rising risks to economic growth, mainly due to the eurozone debt crisis.

The escalating tensions between the West and oil-rich Iran, which insists its nuclear program is for purely peaceful purposes, has led to massive sanctions that have helped push oil prices higher.

Last week a US-based non-governmental organization urged SWIFT board directors for immediate compliance with US and EU Iran sanctions law.

"We have no doubt that you have not sought to oversee an institution that has been an enabling financial mechanism for the Iranian regime to pursue an illicit nuclear weapons program, support terrorist activities, and to engage in brutal human rights abuses," said the NGO, United Against Nuclear Iran, said in letters to the directors.

"In recent months, however, the world has united in an effort to economically isolate the Iranian regime and to sanction its key industries. SWIFT must join that movement or risk continuing to run afoul of applicable sanctions law," UANI said.

"Moreover, SWIFT jeopardizes its good reputation if it continues its work with Iran's financial institutions."

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