Iran banks face cut-off from SWIFT network

Netanyahu welcomes move, US official says it’s like being kicked out of "the financial equivalent of the UN."

Iran rial sanctions 390 (photo credit: REUTERS)
Iran rial sanctions 390
(photo credit: REUTERS)
Iranian banks under EU sanctions will see their ability to transfer money internationally dramatically curtailed starting Saturday, in accordance with a decision by a major financial service cooperative announced Thursday.
SWIFT (Society for Worldwide Interbank Financial Telecommunication), which facilitates most international money transfers, took the unprecedented step of cutting off Iranian banks’ access to its system after the EU regulators who oversee the Brussels-based cooperative ordered it to do so. The US and Israel had been intensively lobbying for the move.
Prime Minister Binyamin Netanyahu, who for months has been calling for “crippling sanctions” against Iran, welcomed the SWIFT decision, a spokesman in his office said.
Netanyahu has been raising the SWIFT issue for weeks, including during his conversations in Ottawa and Washington earlier this month.
“This was a political blow to Iran to be expelled from what is the financial equivalent of the UN,” said Mark Dubowitz, who has been advising the White House and Congress on this and other means of putting economic pressure on Tehran.
“This is a sign that the regime is increasingly politically isolated and that the United States and Europe, despite disagreements on details, are united in their campaign to wage economic warfare on the Iranian regime,” continued Dubowitz, the executive director of the Foundation for the Defense of Democracies.
Congress has been pursuing legislation calling for Iran’s exclusion from SWIFT that would have affected SWIFT itself had it not complied.
Dubowitz said the Obama administration was able to leverage the congressional effort to help convince the EU to issue a directive to SWIFT on its own, before legislation was put in place.
Dubowitz called the move “unprecedented” by SWIFT, which pointed to the extreme level of international sanctions on Iran in making its first-ever decision to exclude a country’s banks.
But he noted that despite the weight of the sanctions felt by Tehran, it showed no signs of changing its nuclear program – the target of the measures – and that more needed to be done.
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One Israeli diplomatic source said this move was “another important step,” but that others still needed to be taken, and not only by European and North American countries.
Israel would like to see Beijing in particular take further steps to isolate Iran, and that is one of the issues Foreign Minister Avigdor Liberman is expected to raise during his stop in China as part of his current trip to Asia.
Liberman met with his South Korean counterpart, Kim Sunghwan, on Thursday in Seoul, and told him that Israel and South Korea have similar problems in that both countries need to deal with nearby dictatorial regimes with nuclear ambitions.
Liberman, according to a statement put out by his office, said the world needed to learn the lessons from North Korea’s nuclear drive over the past two decades.
Both North Korea and Iran used deception to gain time and acquire nuclear weapons, and in both cases the result of those countries acquiring nuclear arms would be destructive for both the region and the world, he said. The international community has to act clearly and decisively against the Iranian-Syrian- North Korean “axis of evil,” he said.
Liberman also told his South Korean counterpart that beyond the nuclear issue, Iran was exerting an extremely negative influence on the region, and that in recent days Islamic Jihad has received encouragement and support from Iran for firing rockets on Israel from the Gaza Strip. Iran played a role in the recent escalation in the South to create instability in the region, and to divert the world’s attention from what was happening in Syria, he said.
Reuters contributed to this report.