The next step in Iran sanctions: cutting off the bank

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By Olivier Knox | The Ticket – Fri, Feb 17, 2012

The White House is welcoming a potentially critical step in the international effort to squeeze Iran over its suspect nuclear program: A statement by the Belgium-based SWIFT network that it is ready to implement sanctions against Tehran. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) handles most international transactions between banks.

"We note SWIFT's intention to stop transactions involving EU-designated Iranian banks when new EU sanctions regulations are in place," National Security Council spokesman Tommy Vietor told Yahoo News in an email. "We welcome this step and will be in contact with our European partners."
SWIFT processes the bulk of cross-border inter-bank transmissions—more than 15 million of them in more than 200 countries. Curbing Iran's access to the system would deepen the Islamic Republic's isolation from world finance and notably make it harder for Tehran to import or export goods.

"Sanctions on financial services have been particularly useful in interfering with illicit Iranian conduct," said Vietor. "We are in conversations with allies and partners about additional ways to increase the cost of their behavior, including by targeting services such as that provided by SWIFT and similar entities."
Western powers led by the United States have charged that Iran hopes to use its nuclear program to develop the ability to make an atomic arsenal. Tehran has denied the allegation.

As Yahoo News reported Thursday, SWIFT's general counsel is due in Washington next week, and will meet Democratic Senator Robert Menendez, key author of a legislative proposal to drive Iranian banks, including its central bank, out of SWIFT.