The world’s biggest electronic banking system is ready to block Iran’s central bank from using its network to transfer funds, a US congressional aide said on Friday after a briefing from the Belgium-based group earlier this week.
Under pressure from the United States to stop Iran’s banks from using its global network, SWIFT has said it was prepared to block Iranian transactions as Tehran maintains its nuclear programme is strictly for peaceful purposes. Expelling the Iranian central bank, which acts as the clearinghouse for Tehran’s oil revenues, would essentially cut off the country’s most powerful vehicle to move funds electronically.
The United States has already imposed sanctions on the largest Iranian state-owned banks and is getting ready to punish countries and their institutions if they continue to deal with the central bank of Iran.
European Union governments may agree in coming weeks on rules to push Iranian banks from SWIFT - regulations that SWIFT said it was waiting for in order to block Iran’s banks.
In meetings with US lawmakers and their staff about US legislation that would force SWIFT to act, its general counsel said the company was hoping the European Union’s law would include banning the Iranian central bank, the congressional aide involved with the talks said.
“SWIFT is hoping that the final EU regulation includes the central bank. They would rather have an outright expulsion order than ‘they can use it for this and not for that,’” said the aide who was not authorised to speak publicly.
“It would take them a lot of money, time, to revise their software to have to come up with a system where some banks are allowed to use their network for certain transactions,” said the aide.
Looming sanctions by the United States and an impending European Union oil embargo have started to hinder Iran’s ability to pull in revenues from the oil it produces. The US sanctions include exemptions for food, medicine and other humanitarian supplies.
SWIFT said it “stands ready to act and discontinue its services to sanctioned Iranian financial institutions as soon as it has clarity on EU legislation currently being drafted.”
SWIFT, which has never cut off a country, is vital to international money flows, exchanging an average 18 million payment messages a day among banks and other financial institutions in 210 countries.
The US Treasury had no comment.