Shutting Off Iran’s Finances

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....

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