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Iran cut off from global financial system [Copy link] 中文

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Post time 2012-3-19 00:56:10 |Display all floors
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Iran cut off from global financial systemMarch 15, 2012

By DON MELVIN, Associated Press

BRUSSELS (AP) — Iran was largely cut off from global commerce Thursday after the company that handles worldwide financial transactions said it was severing ties with many Iranian banks to back EU sanctions against Tehran.

The action by the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, aims to enforce European Union sanctions discouraging Tehran from developing nuclear weapons.

It will go a long way toward isolating Iran financially. SWIFT is a banking hub crucial to oil, financial transactions and other trades and global financial transactions are impossible to conduct without using it.

Because of its reach, SWIFT's decision to cut off some 30 Iranian banks and subsidiaries could hinder not only banking but also the country's lucrative crude oil industry and possibly hurt Iranian households that depend on remittances from relatives living abroad.
"Disconnecting banks is an extraordinary and unprecedented step for SWIFT," said Lazaro Campos, chief executive of the company. "It is a direct result of international and multilateral action to intensify financial sanctions against Iran."

In a statement, the company said the EU decision to impose sanctions "prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks" and "forces SWIFT to take action."

There was no immediate reaction from the Iranian government or the banks involved. Not all Iranian banks are subject to EU sanctions.

Although Thursday's move added no new sanctions, it aimed to maximize the impact of the EU sanctions already approved.
"It's tightening the noose," said Ali Ansari, an expert on the Middle East at the London-based Chatham House think tank. "It will just reinforce what's already been happening."

And that, he said, is increasing Iran's isolation and difficulty in conducting trade and commerce.
In a statement, the European Council — comprised of the government leaders of the 27 European Union countries — said it had "developed the application" of its restrictive measures against Iran.

"In this context, the Council agreed that no specialized financial messaging shall be provided to those persons and entities subject to an asset freeze," the statement said.

In addition to sanctioning Iranian officials and freezing the assets of certain companies, the European Union plans to institute an embargo on the import of Iranian oil in July — an attempt to choke off funding for Iran's nuclear program.

The EU sanctions are aimed at forcing Iran to demonstrate to the international community that it is not trying to develop nuclear weapons. Iran says that its nuclear program is for peaceful purposes only, but officials in many other countries — including the United States and Israel — believe otherwise.

SWIFT and similar services facilitate not only large financial transactions but small ones as well, raising the question of whether the EU directive could have unintended consequences.

Many Iranians, including opponents of the current regime, live abroad and may use these financial transaction services to send small amounts of money to their families back home on a regular basis.

Washington and allies Britain, France and Germany have sought a tough approach toward Iran over the nuclear issue but have run into resistance from Russia and China.

Russia, China and the four Western nations have agreed to meet with Iran in another effort to seek a negotiated solution, but East-West disagreements within the group are greater than ever.

A previous series of talks between the six and Iran ended in failure, the last one more than a year ago in Istanbul, Turkey.


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Post time 2012-3-19 00:59:13 |Display all floors
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‘Iran will give strong response to being expelled from SWIFT’

From PressTV


If the United States or Europe considers it its right to ignore international laws to meet its own interests, Iran may also decide to respond in kind wherever possible.”

A former Iranian intelligence minister says if Iranian banks are cut off from the global electronic money transfer system, Tehran will use every possible means to respond in kind.


Reacting to reports about the Society for Worldwide Interbank Financial Telecommunication (SWIFT) decision to discontinue offering service to the Iranian banks, Ali Fallahian said on Saturday that closing SWIFT to Iran is “like closing international waterways,” Fars News Agency reported.

“If the United States or Europe considers it its right to ignore international laws to meet its own interests, Iran may also decide to respond in kind wherever possible,” he added.

The former intelligence minister also warned Western countries not to underestimate Iran's ability to close the strategic Strait of Hormuz in reaction to the West’s escalating pressures.

The Strait of Hormuz is a narrow shipping channel that leads in and out of the Persian Gulf between Iran and Oman, with a daily flow of about 15-17 million barrels of oil. The figure accounts for 90 percent of Persian Gulf oil exports and 40 percent of global consumption.

On Thursday, March 15, SWIFT CEO Lazaro Campos said in a statement that the society has decided to discontinue offering 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," he added.

Experts believe SWIFT’s new action is meant to fully enforce EU sanctions against Iran, as global financial transactions are impossible without using SWIFT.

Established in 1973, SWIFT is an international clearing system which handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries.

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