Shutting Off Iran’s Finances

Pages: 1 2

On Thursday, the European Union (EU) ordered the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to block Iranian banks currently subjected to EU sanctions from using their service. SWIFT is a financial transaction company used by almost every bank around the world to send payment messages to each other. Since global financial transactions are virtually impossible to implement without SWIFT, the move represents the EU’s most determined effort to date to convince Iran that its pursuit of nuclear weapons is unacceptable. SWIFT announced it would comply with the order by Saturday. The decision is no doubt being met with high anxiety from diplomacy advocates. International sanctions have so far been woefully unsuccessful, and options are dwindling. Economic isolation, coupled with upcoming talks with the Iranian regime, have opponents of military intervention scraping the bottom of the diplomatic barrel.

“This EU decision forces SWIFT to take action,” said Lazaro Campos, SWIFT’s chief executive. “Disconnecting banks is an extraordinary and unprecedented step for SWIFT. It is a direct result of international and multilateral action to intensify financial sanctions against Iran.”

SWIFT was set up in Belgium by banks in 1973. In 1987, non-bank financial institutions were allowed to join, followed by corporate customers of banks in 2000. The service has more than 10,000 users in 210 countries, and sends approximately 17 million messages every day. It is overseen by the central banks of Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, the United Kingdom, the United States, Switzerland, Sweden, and the European Central Bank. It neither holds nor transfers money, but provides a common language and a secure private system allowing banks to communicate payment messages to each other.

Yet the system, while effective, is far from perfect. On the plus side, it will hinder Iran’s ability to sell as much oil as it is currently selling, and may even force the nation to sell oil at below-market prices as a result. Financial institutions outside the SWIFT umbrella may hesitate to cooperate with Iran out of fear of being banned from doing business with other nations. Furthermore, the ban could force Iran to use hard assets like gold to complete transactions, making trading inefficient and risky.

On the minus side, some banks, notably those in China and India that are still planning to purchase Iranian oil, could communicate with Iran outside the network. And since SWIFT outsources some of its messaging to regional contractors, it remains possible that Iran could co-mingle its oil with oil that flows through international pipelines, masking its origin. Iran could also accept payments for transactions in a bank outside the country, purchase goods and services in that country, and import them back into Iran.

Some critics contend the move could backfire, forcing oil prices higher and undermining SWIFT’s reputation. Others worry that ordinary Iranians, even those hostile to the current regime, will be cut off from money sent to them by relatives living outside the country.

In addition, there is currently a lack of coordination between the EU and the United States. The EU measure only affects sanctioned Iranian banks, and 30 of those banks and their subsidiaries have been cut off as a result. On the other hand, the U.S. Congress has proposed legislation that seeks to ban transactions with any Iranian banks. The U.S. currently bans 23 Iranian banks, the bulk of which are covered by the EU ban. But congressional lawmakers contend at least 20 additional banks are being used to underwrite both Iran’s nuclear program trade and provide support for terrorist groups. According to congressional aides, the new law could subject some European companies to penalties and sanctions, including banning them from the U.S. financial system, even if they fully comply with EU rules. Thus, the U.S., while appreciative of this latest move by the EU, seeks to pressure Europe to go even further. The EU does intend to ratchet up the pressure in July, when an embargo on the importation of Iranian oil will be implemented.

Iran has already been feeling such pressure, even before yesterday’s announcement by the EU, as the sanctions already imposed on that nation since November have had some effect. Reuters revealed that Iran is stockpiling food to blunt their effects. Ships carrying at least 396,832 tons of grain are lined up to unload, reflecting a frantic level of shopping in which Iran has purchased what amounts to a year’s supply of wheat in a little over one month. In order to work around the sanctions, they are paying premium prices for the shipments, and using non-dollar currencies such as Japanese yen and Russian rubles to pay for them.

Pages: 1 2

  • Roger

    All this sounds so impressive. Until you realize that Iran is very close to nuclear weapons and the missiles to deliver them. This buys them time, and they just had a bunch of grain delivered for their stockpiles.

    This is Obama playing checkers at a chess match. They're tying our hands militarily while they keep us at the table.

    • ★FALCON★

      Right Rog, anyone who thinks that sanctions are going to work hasn't followed the last 35 plus years of the on-going sanctions. Iran will continue to trade with other rogue countries and this is another useless charade.

      Also, DUQU – an innerchangeable component of Stuxnet – has found that Iran already has a triggering device.

    • Stephen_Brady

      I, for one, am ready to pay the higher gas prices that will result from an Israeli attack on Iran. The Mullahs and Ahmadinejad must NEVER get their hands on nuclear weapons.

      Our hands are tied, but not Israel's.

    • BS77

      Yes, the heck with Iran's finances and sanctions etc….it's time to SHUT down their nuclear weapon's facilities and factories….which could take about fifteen minutes. Turn the weapons labs into a smoking pile of rubble. The world will be a safer place.

  • StephenD

    Roger says "This is Obama playing checkers at a chess match."
    I'd say more like Taking a knife to a gun fight.

    • Roger


    • RUI

      Not one to pile in, but I say it's more like taking flowers to a gun fight. Taking a knife is an aknowledgement that at least you ARE in a fight, albeit with the wrong tool for the job. This disastrous administration seems to think we're not in a fight.

  • Ron Carnine

    Who is the most dangerous man in the world? It is the American president. He talks tough but the world knows that his action with the US military makes his administration a toothless old lion. He can't back up his threats (promises?). Iran is going to obtain nuclear weapons and when they get them the are going to attack Israel. Israel cannot afford to wait much longer if it is going to strike. Will such a strike be effective? Probably not, since most of Iran's nuclear ability is already secured under a mountain. Israel can't wait until after American elections, Obama is playing with fire, using Israel to get reelected, something terribly selfish and dangerous. The next few months are going to be very interesting..

  • Alvaro

    "[…] Obama is playing with fire, using Israel to get reelected, something terribly selfish and dangerous."

    What else can you expect from a narcissist like him?

  • ObamaYoMoma

    If Obama puts his reelection campaign above American national security because he fears temporary skyrocketing oil prices will derail his reelection campaign and in the mean time Iran acquires nukes with impunity, it will be the end of the world as we once knew it. As skyrocketing world oil prices on a permanent basis will be the least of our problems, as that Saudi owned Pakistani nuclear weapons arsenal in Pakistan will be proliferated throughout the Sunni Islamic world virtually overnight to counter a nuclear armed Shi'a Iran.

    Hence, the Islamic world with its imperative to make Islam supreme throughout the world will become armed to the teeth with nuclear weapons and world oil prices as a result will inevitably skyrocket on a permanent basis because an Iran with nuclear weapons will inevitably become a far more belligerent and aggressive Iran once it acquires nukes.

    By the way, it will also be the end of Israel, as Israel's once very lucrative tourism industry will come to a very immediate and abrupt halt, and millions of Jews will also inevitably emigrate from Israel to escape probable annihilation. They will also take with them their businesses and industries and that will also destroy Israel's economy and Israel in the process.

    Hence, Israel and its newly discovered gigantic gas fields will soon be subsumed by the Islamic world (Dar al Islam) and the Islamic world's long perpetual jihad of conquest against the Jewish unbelievers in Israel will finally be realized. Which will only serve to make the Islamic world become far more emboldened.

    Meanwhile, why aren't the Republicans pointing out the obvious that Obama is putting his reelection campaign above the national security of the USA?

  • xXx

    This is unbelievable…You can't just stop Iran's money like that because you are EU. No matter who you are you can't do that. So what they have a nuclear project. Actually nobody knows for real what is for that project. When USA or Europe had their nuclear project did somebody said something? I don't think so…Now that Iran got some nuclear business their are shitting their pants…

  • Free Porn

    This is unbelievable…You can't just stop Iran's money like that because you are EU. No matter who you are you can't do that. So what they have a nuclear project. Actually nobody knows for real what is for that project. When USA or Europe had their nuclear project did somebody said something? I don't think so…Now that Iran got some nuclear business their are shitting their pants…

    • ObamaYoMoma

      Apparently, you are so far gone that you stupidly morally equate Muslims with non-Muslims. Could you please explain how you became so mentally incompetent? Did you fall down and hit your head or something?

  • David M

    I – an Iranian citizen, neither Christian nor Jewish — am in pains to say that appeasement and sanctions are not working and mullahs are going to produce (if already not done it, thanks to Pakistan, China, Russia, North Korea, ……..) the bomb and use it. Tens of millions of Iranians hate Islam who have my sympathy and there are tens of millions of Iranians who have become new Nazis and I wish them the worst pain in life.

    • Alvaro

      Take care. Two of my friends are Iranians, and both of them are horrified by the government. The people of Iran deserve better than this.

  • Amused

    Boy , Ahert , you got a real talent for rousing the weakminded . What do you suggest Ahert …..Nuk'em NOW ? More warmongering from CHICKEN-HAWKS .

    • mah29001

      Maybe if Iran didn't spend its money on a nuclear program that it did not need, maybe there would be no talk of war with Iran.

  • Alvaro

    Ahmadinejad is a real pig and should hang at the end of a rope.

    At the same time Obama has participated in f*cking up the Middle East though the "Arab spring" in an alliance with Sunni Saudis and their petrodollars on one side, and the Sunni Muslim Brotherhood on the other. Europe is being swamped with even more Muslim "refugees" because of this.

    The next target is Syria, and then comes Iran. After that, Shia Islam is defeated, the ideology of the Muslim Brotherhood and Al-Qaeda is established in the entire region, and Europe is drowning in an ocean of "refugees".

    What is the plan of American foreign policy? To spread orthodox Sunni Islam to the entire planet? If that is the plan, well done. Everything is going according to plan.

  • maghrebchristians

    “Whether or not you want us in the European Union, our influence in Europe is growing. We are more numerous. We are younger. We are stronger.”

    A second-generation Muslim immigrant in Austria has authored a provocative new book in which he argues that Europe’s future is Turkish, whether Europeans like it or not

    Read more:


    • Amused

      keep dreaming pal , soon the imaginary line that muslims no doubt will cross, will be crossed ….then it will be crying time for muslims in Europe . It's building now , but you know civilised people are slower to anger , but when they do ….it will be hell to pay .

  • Steve Chavez

    We need to end financing the UNITED NATIONS since it is this body that is incompetent. Its IAEA is complicit with every enemy of the United States since all their goals are the same: The destruction of Israel which is Obama's secret goal too but who American Jew will still blindly support!

  • Amused

    Take a pill chavez , you are blinded by your hate for the man ….and your regurgitating all the shiiit you been fed by the other moronic members of the hate Obama club . There is no "secret plan " that's a dumbass lie of the malcontent liars of the right , just like kill grandma , and 'SECRIT CONCENTRATION CAMPS being prepared by Obama for all the "good Americans " …'re an idiot Chavez , an insult to your ancestors and an embarrassment to clear thinking Americans . You don't speak for American Jews , they don't need asssholes like you telling them what to do or think , that;s right , not you or the rest of the idiots of your lot .

  • exterminate the jews

    Stop starting wars, you filthy kykes.

    • UCSPanther

      Looks like we got ourselves a troll…

    • mah29001

      Maybe when you stop being a Jew-hater we'll stop, how about that?

    • BS77

      where is the garbage filter on this website?

    • elihu

      You want to try and start that extermination with me? I'm a Jew.

  • DeShawn

    Hey, jew-loving goys: did you now that jews are the biggest mass murderers in history? That's right: the Soviets, run by jews (, killed over 60 million men, women, and children. That's the REAL holocaust. And through their slave trade, your beloved "chosen" killed and enslaved millions of Africans ( So before you worship these demons, remember that they are YOUR ENEMY. They hate you and don't even think of you as human. All you need to do is look at hte talMUD:

    Chew on that, you unholy Christ killers. Try to prove my facts wrong. You can't.

  • Riot Points

    It's an interesting move, I agree with the article that its going to backfire big time and probably force oil up.

  • WilliamJamesWard

    Why cut off Irans finances, cut off the oxygen and end the appeasement, Iran will use the bomb when
    it has it and to wait is insane, the Mullahs have to go and the maddinnerjacket should be first to see
    the light of ten thousand suns………………………………………………………..William

  • Cleveland Hoose

    Music began playing when I opened this site, so frustrating!

  • DogsHateRomney

    ~ OBAMA's MARXIST Rules for Radicals



  • john in cheshire

    If we are to neutralise islam then we should target all the ayatollahs, imams, and mullahs. If these vipers were wiped out then perhaps normal people could assert themselves in the muslim world. If we do that and they don't, then my feeling that following islam is a genetic defect would be proven.

  • Saltire

    Interesting that this SWIFT story and action occur; then, IRAN changes it's currency policies to reflect two levels. One level is a street level and the other is an "official" level for trade and imports.

  • mrbean

    The term you correctly used was oblierate – but that is not the vocabulary of our leaders Ivy League mothers boy syndrome of containment (as opposed to victory) that has been around since Korean war and it has failed time and time again and it will fail in Iraqand Afghanistan – and in Iran. And to think the oblieration lesson that the Romans taught us with Carthage is still unlearned. Totally anihilated enemies cannot come back for a rematch.

  • mrbean

    Dead man walking McCain wants us to bomb Iran – and was asked "Then what?" by the journalist. His answer was a errr,,, ahhhh,, we will have to see errr ahhh.. but we have to do something. Imagine that had this dead man walking seen too many winters dog whose day is done as a GOP presidential candidate. No wonder Obama got elected. Well…. my friends…. ahhhh… errr….ahhh

  • kentatwater

    I know he's black, but I imagine that Obama doesn't want war period.

    What an inflammatory and irresponsible thing to say.

  • ObamaYoMoma

    Because that is an inflammatory and irresponsible thing to say.

    Excuse me, but that is an inflammatory and irresponsible thing to do! Apparently, like most unhinged self-hating delusional leftists, you and the truth are at war.

    I know he's black, but I imagine that Obama doesn't want war period.

    Obama's is also half white. In any event, I don't see race when I look at Obama. As a matter of fact, I could care less what race Obama is. What I see instead is gross incompetence on a monumental scale.

    Nevertheless, no one wants war, but sometimes war is a necessary evil and in this case it is a very necessary evil. As if Iran gets nukes with impunity, the world as we all once knew it will be changed forever for the worse. Apparently, you aren't educated and mature enough to be able to connect the dots, which is something you more than demonstrated yesterday.

    Indeed, why don't you go contribute somewhere else where the other contributors match your intellectual level. This place is way above your measly pay grade.

  • Roger

    McCain is a good reason for why we set the retirement age for people.
    He's too far gone to realize he needs to go.

  • Old_BBart_School

    ~ Mr. Bean. – YOU BLOW!

  • Grayzel1

    A very intelligent reply. It is easy to understand why you want the Great King Obama The First to reign again.

  • DogsHateRomney

    Replying to Grayzel1 41p

    Have you read my posts? – They are un-ambiguous.

    Your life allows you to ding me in (less than) 10 minutes.

    You seem unable to engage me on CONTENT, or, Debate me on substance.

    My HUMOR & FACTS are an Epitaph to your emotional posts.