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Swift May Expel Iran’s Central Bank, Hindering Oil Payments

Mark Dubowitz
24th February 2012 - Quoted by Indira A.R. Lakshmanan, Bloomberg

Mark Dubowitz, executive director of the Foundation for the Defense of Democracies in Washington, said he believes Swift is seeking “political cover to do something unprecedented” that might set an unwanted example for governments to press for the expulsion of other members.

“They want to be able to say, ‘We are governed by European law and only if the Europeans tell us we have to remove these institutions do we comply,’” Dubowitz, who has advised lawmakers and the administration on the implications of a Swift ban on Iran, said in an interview. “Otherwise, they risk becoming a political football if China asks them to expel Taiwanese banks, for example.” ...

Dubowitz said he is concerned that expelling Iran’s central bank from Swift might complicate legal trade in food, medicine and oil. He recommended EU regulators and Swift work closely with the U.S. to minimize the risk of an oil price spike.

“If the central bank can be expelled from Swift while allowing permitted oil trades to occur through other legal mechanisms, I would fully support its expulsion,” he said.

“There is little point in driving 20 percent reductions in Iranian oil exports if global oil prices then increase by 30 percent,” he said. “That will only enrich Iran’s Supreme Leader Ali Khamenei while plunging the rest of us into an oil- led recession.”

Read the full article here.

Tags

iran, oil, sanctions, swift