A day after the Brussels-based SWIFT global payment system cut off major Iranian
banks, Prime Minister Binyamin Netanyahu – while welcoming the move – told
cabinet ministers on Sunday that still tougher measures were
Calling the move “positive,” Netanyahu curbed his enthusiasm by
saying that only time would tell how effective it would be.
SWIFT is the
world’s largest electronic payment system and on Saturday it implemented its
decision to cut off 30 Iranian banks blacklisted by EU-supported economic
Among the banks affected by the move are those believed to be
financing Iran’s nuclear activity or terrorism – Mellat, Post, Saderat and
Netanyahu has been lobbying in favor of this move for months, as
well as for an EU embargo on Iranian oil that will go into effect in July. He
did not spell out what tougher measures he thought still needed to be
In recent days the prime minister has said that Iran’s decision
to once again sit down for talks with the P5+1 – the five permanent members of
the Security Council plus Germany – is an indication that Tehran is concerned about the strict measures that have
recently been enacted. Yet he said there was still no evidence that the Iranians
were abandoning their nuclear program – and stopping their program, he believes,
is the litmus test for the effectiveness of the sanctions.
reported on Sunday night that Turkish Prime Minister Recep Tayyip Erdogan will
meet with Iran’s supreme leader, Ayatollah Ali Khamenei, in Iran in 10 days to
try to get him to back down from both the nuclear program as well as support for
Syrian President Bashar Assad.
Before meeting Khamenei, Erdogan is
scheduled to meet with US President Barack Obama at the Seoul Nuclear Security
Summit from March 27 to 29.
Netanyahu also told cabinet ministers that
Iran was behind the challenges Israel was facing today from the Gaza Strip. The
terrorist groups there, he said, would not have the same power to threaten
Israel were it not for Iranian support. If you took Tehran out of the equation,
the terrorist groups’ ability to harm Israel would be greatly diminished since
it was Iran that provided those organizations with weapons, missiles, money and
logistical support, he said.
Finance Minister Yuval Steinitz, meanwhile,
termed the SWIFT move a “hard blow to the Iranian economy,” saying it would make
it very difficult for Iran to both import and export goods.
make it very difficult for their oil transactions and they will only be able to
trade in cash or gold,” he said.
“And this is impossible when you are
talking about sums in the billions. Therefore, this is a dramatic step that is
liable to bring about the collapse of Iran’s economy.”
Netanyahu, Steinitz said he did not know whether this would be enough to get the
Iranians to abandon their nuclear ambitions.
Even as the SWIFT decision
was implemented, Tehran took urgent steps to withstand the
Reuters shipping data showed that vessels carrying at least
360,000 tons of grain were lined up to unload in Iran, a sign that Tehran was
stockpiling huge amounts of food to blunt the affect of tougher Western
sanctions. It had even begun buying wheat from its arch-enemy, the United
“There is no doubt in my mind it is geopolitical hedging,”
Rabobank commodities analyst Nick Higgins said.
“They are trying to get
as much as they can in the country to blunt the effect of any further escalation
in international sanctions.”
The sanctions regime exempts
Some overseas Iranian businessmen said the SWIFT move could
strangle their operations.
“This is like our lifeline to the outside
being cut,” said Naser Shaker, who owns an oil and gas trading company in Dubai.
“All the transactions will be stopped. Through the banks there are no more
Morteza Masoumzadeh, a member of the executive committee of the
Iranian Business Council in Dubai and managing director of the Jumbo Line
Shipping Agency, said it was “devastating news.”
“If Iranian banks cannot
exchange payments with banks around the world, then this will cause the collapse
of many banking relations and many businesses,” he said.
administration applauded SWIFT’s move and said it reflected a consensus in the
international community that “substantially increased pressure” was needed to
convince the Iranian government to address concerns about its nuclear
But US lawmakers pushing for tougher sanctions on Iran said
SWIFT needed to eradicate all Iranian financial institutions from its network,
not just those blacklisted by the West.
“The impact of financial
sanctions will not come close to full potential if Iran can simply go across the
street to a non-designated bank to conduct the transactions with those still
willing to do business with it,” said Rep. Brad Sherman, a Democrat from
California, who is working with Republican Sen. Mark Kirk of Illinois on
legislation that would extend sanctions to all Iranian banks.
last year, Iran has largely been frozen out of the global banking system.
Washington has used anti-moneylaundering legislation to make it risky for banks
around the world to do business with Tehran, including trade
Iranian businessmen have continued to conduct some trade with
Dubai and other places, however, by transferring funds through money exchange
houses. But over the past few weeks, many of those houses have stopped doing
Iranian rial business as well.
Mohamed al-Ansari, chairman and managing
director of Al Ansari Exchange, one of the United Arab Emirates’ top two
exchange houses, said the weakness of the rial, which saw its black market rate
roughly halve against the dollar in the year to January, had made it too risky
to handle the currency.
“Most exchange companies have stopped dealing in
the Iranian rial mainly because of its devaluation in the last few months, as
well as the regulations imposed by the US regulatory authorities on the
financial sector,” he said.Reuters contributed to this report.