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Iran expulsion from SWIFT banking network urged by lawmakers

Credit : Michael Peel & Jim Brunsden

The United States lawmakers are calling for Iran’s expulsion from the financial system that oversees international bank transfers. The Trump administration is re-imposing sanctions on Iran’s regime due to its withdrawal from the Joint Comprehensive Plan of Action (JCPOA). However, the sanctions will have limited effect if Iran is still able to access SWIFT.

European countries have attempted to keep this backdoor open to Iran, in hopes of keeping the JCPOA alive. Lawmakers acknowledge this backdoor and are urging the U.S. Treasury Department to close that backdoor by disconnecting Iran.

Disconnecting Iran from network seen as critical

The U.S. lawmakers see disconnection from the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The organization is based in Belgium, but its board also includes members from the U.S. financial industry. Federal law gives the administration authority to act against the Iranian central bank, thus they are putting pressure on the board to deny access to Iran.

“The administration’s maximum pressure campaign will not succeed if the Islamic Republic remains connected to SWIFT,” said the statement from the lawmakers. They noted that the success of the Trump administration’s plans to create change in Iran through pressure from sanctions would be limited if it could still conduct business through SWIFT.

The letter from the lawmakers was sent after the European Union announced its first financial support package for Iran. The package is estimated to be worth $21 million and it is part of the EU efforts to keep the JCPOA intact.

Europe calls for alternative banking system

Germany’s foreign minister, Heiko Maas is also calling for Europe to create a banking system separate from SWIFT, essentially allowing Iran to receive payments through an alternative method. He sees it as a way to protect European companies from the impact of U.S. sanctions and their penalties.

“That is why it is indispensable to strengthen European autonomy by setting up payment channels that are independent of the U.S., creating a European monetary fund and setting up an independent SWIFT system,” said Maas.

Germany’s foreign minister, Heiko Maas

Germany’s foreign minister, Heiko Maas

President Donald Trump withdrew from the JCPOA in May 2018, and in August, they began re-imposing sanctions against organizations and individuals associated with Iran. Other parties to the deal have raised objections, but the Trump administration is moving forward. They have also indicated that stiffer penalties are coming in November, which are related to the Iranian oil and gas industry.

The plan appears to be economic crippling of the Iranian regime by limiting its oil sales throughout the international market.

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