SWIFT Suspends Iran Banks

SWIFT Suspends Iran Banks

Monday, 5 November, 2018 - 18:30
A man passes the SWIFT logo at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. (Reuters)
Asharq Al-Awsat
As the newly imposed US sanctions took effect against Iran, the SWIFT banking network announced Monday that has suspended several Iranian banks from its services.

"In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, SWIFT is suspending certain Iranian banks' access to the messaging system," it said.

"This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system."

SWIFT, the Belgian-based Society for Worldwide Interbank Financial Telecommunication, provides banks with a secure messenger network to allow international transfers.

Without its services, Iranian banks will find it more difficult to do business with any client prepared to brave US sanctions to maintain ties with Tehran.

It its brief statement Monday, SWIFT made no mention of US sanctions coming back into effect. This likely reflects the fact that it is caught between two contrary regulatory demands.

The US government has told SWIFT that it is expected to comply with US sanctions and it could face US sanctions if it fails to do so. On the other hand, SWIFT is barred from doing so under the European Union’s so-called blocking statute, which could subject it to European penalties for complying with US law.

Some US sanctions on Iranian banks and oil exports had been suspended after Iran signed a landmark 2105 deal with six world powers to curtail its nuclear ambitions.

But these came back into effect Monday after President Donald Trump pulled out of the accord and demanded that the world again turn up the economic heat on Tehran.

US Secretary of State Mike Pompeo said waivers would be issued to allow eight countries to buy Iranian oil, but that otherwise the measures would be "relentless."

SWIFT connects 11,000 banks and financial institutions in 200 countries and territories, while prising itself on taking a neutral political stance.

It does not hold or manage client funds, but allows the banks to transfer funds by sending messages across the network.

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