SWIFT Justice: International Clearinghouse Drops Iran

 

 

 

 

 

 

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As many Americans take time to honor former presidents, U.S. officials and their allies will move forward with a strategy that could cripple the international financial capabilities of an already sanctioned nation.

The Society for Worldwide Interbank Financial Telecommunication — more commonly known as SWIFT — will no longer provide service to banks headquartered in Iran, multiple outlets reported Friday, effectively eliminating the Middle Eastern nation from an enormous component of global commerce.

An average of 18 million payment messages are processed by Belgium-based SWIFT each day, according to Reuters, connecting 210 nations. In 2010, Iranian banks and their affiliates sent and received 2 million payments communications, including messages from banks the U.S. has explicitly accused of financing terrorism, Reuters says.

“If SWIFT follows through on its public commitment to ban Iranian banks, it could sever the Iranian regime’s financial lifeline,” Mark Dubowitz told ABC News. Dubowitz is an Iran sanctions expert advising the Obama administration. “It would also be a significant political embarrassment for the regime: Iran would be the first country in SWIFT’s history to be expelled from what is the financial equivalent of the United Nations.”

The move is not without risk. Removing Iran from the global economy could push oil prices sky high, BusinessWeek writes, noting that Iran already reduced its oil exports to several nations last week. On Wednesday, the Obama administration was “divided” over the appropriateness of booting Iran from SWIFT, BusinessWeek said, given threats to the global economic recovery.

Despite the potential downside, however, the bold action does appear to have already paid off. According to the New York Times, Saeed Jalili, a senior nuclear negotiator for Iran, declared his country’s “readiness for dialogue” at “the earliest possibility.”

“This response from the Iranian Government is one we’ve been waiting for,” said U.S. Secretary of State Hillary Rodham Clinton at a press conference Friday. “If we do proceed, it will have to be a sustained effort that can produce results,” she said.