'SWIFT sanctions could topple Iranian economy'

Steinitz: Sanctions barring Iran from int'l fund transfer system make receiving money for big oil transactions impossible.

March 18, 2012 12:39
2 minute read.
Iranian handles money at bazaar

Iranian handles money at bazaar 370. (photo credit: REUTERS)


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Finance Minister Yuval Steinitz said Sunday that SWIFT's decision to halt Iran's ability to use its electronic fund transfer system to make international transfers constitutes a tremendous blow that could potentially lead to the collapse of the Iranian economy.

SWIFT is the world's largest electronic payment system and on Saturday implemented its decision to cut off 30 Iranian banks blacklisted by EU supported economic sanctions. By SWIFT's own admission, the move is "extraordinary" and "unprecedented."

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Speaking prior to the weekly cabinet meeting, Steinitz said that cutting Iran off from making international transfers will "make importing and exporting very difficult" for Tehran.

Steinitz stated that the move makes receiving money for billion dollar oil transactions impossible.

The finance minister called SWIFT's decision "dramatic," but said he did not know if it would halt Iran's drive for nuclear weapons.

Earlier on Sunday, Vice Premier Silvan Shalom said that the cumulative impact of the oil and SWIFT sanctions may soon reach the point of convincing the Iranian regime that it can only survive by abandoning its push for nuclear weapons.

Shalom stated that Israel is satisfied with SWIFT's decision and estimated that within a few weeks, the impact on the Iranian economy would become apparent.

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Shalom told Army Radio that the decision is likely to prove decisive in the struggle against Iran's [nuclear] arms race. “Iran is progressing with its nuclear weapons program in order to safeguard the regime's rule. But the moment that the sanctions become this severe, first with oil and now with [money] transfers, perhaps we will get to a point where they will understand that only abandoning the [nuclear weapons] program will allow the regime to survive,” said Shalom.

He added that in today's world, “We already don't do transfers using documents. Everything is done by international [electronic] transfers. What will they do now? Carry around suitcases with gold?”

Meanwhile, Iran responded to the SWIFT sanctions, characterizing them as unnecessary since Iran maintains that it has no desire to build a nuclear bomb. "I think they know pretty well, I think the United States intelligence services and the West know that we are not after building nuclear weapons," said Mohammad Javad Larijani, Secretary General of Iran's High Council on Human Rights.

On the other hand, the US is cheering the EU's move. Under Secretary of Treasury David Cohen said, "The decision reflects the growing international consensus that substantially increased pressure is needed to convince the Iranian regime to address the international community's concerns about its illicit nuclear activities."

Reuters contributed to this report.

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