FDD Applauds SWIFT for Expelling Iranian Banks

PRESS RELEASE
FOR IMMEDIATE RELEASE

Washington, DC (FDD, March 15, 2012) – SWIFT, a top clearinghouse for international financial transactions, announced today that it will expel Iranian banks in response to European Union sanctions.

The Brussels-based Society for Worldwide Interbank Financial Transactions, a secure financial messaging platform used by over 10,000 international institutions in 210 countries, announced in a statement on Thursday that it would stop providing its financial messaging services to Iranian banks that are subject to EU sanctions. SWIFT is incorporated under Belgian law.

“This EU decision forces SWIFT to take action” said Lázaro Campos, CEO of SWIFT. “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.”

SWIFT will disconnect the sanctioned Iranian banks on Saturday, March 17 at 1600 GMT.

“Iran is the first country in history to be thrown out of SWIFT,” said FDD executive director Mark Dubowitz, who has advised the Obama administration and key congressional offices on SWIFT and other sanctions measures. “This could deny Iran’s banks the ability to move billions of dollars, and ratchet up the economic pressure on leaders who have so far refused to reach a negotiated settlement on their illegal nuclear weapons program.”

In 2010, 19 Iranian banks and 25 Iranian entities reportedly used SWIFT more than 2 million times. These transactions, the Wall Street Journal notes, amounted to $35 billion in trade with Europe alone, and they almost certainly violate existing sanctions laws.

FDD applauds Obama administration officials for their continuing diplomatic efforts with the EU and SWIFT, and Senate Banking Committee chairman Tim Johnson (D-SD) and ranking member Richard Shelby (R-AL) for unanimously adopting the amendment that produced this result. Senator Mark Kirk (R-IL) initially led the charge for this amendment in the Senate, and Senators Robert Menendez (D-NJ) and Roger Wicker (R-MS) carried forward his efforts.

In the House of Representatives, Foreign Affairs Committee chairwoman Ileana Ros-Lehtinen (R-FL), and Reps. Brad Sherman (D-CA), Ed Royce (R-CA) and Steve Chabot (R-OH) advanced a companion bill with even tougher provisions, which would have imposed sanctions on SWIFT if did not comply.

“SWIFT’s unprecedented move shows that it views the threat of a nuclear Iran with the utmost concern,” says FDD’s vice president for research, Jonathan Schanzer, a former analyst in the Office of Terrorism and Financial Intelligence at the U.S. Department of the Treasury. “This is the most widely-used electronic banking system in the world. It’s hard to imagine a more meaningful measure.”

To discuss the Foundation for Defense of Democracies’ work on U.S. and EU sanctions on Iran, or schedule interviews with Mr. Dubowitz, Mr. Schanzer, or any of FDD’s other experts, please contact David Donadio at [email protected].

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The Foundation for Defense of Democracies is a non-profit, non-partisan policy institute dedicated exclusively to promoting pluralism, defending democratic values, and fighting the ideologies that drive terrorism.