February 23rd, 2012
03:04 PM ET

A SWIFT Iranian knockout blow

Editor's NoteAvi Jorisch, a former U.S. Treasury Department official, is senior fellow for counterterrorism at the American Foreign Policy Council in Washington, D.C.

By Avi Jorisch - Special to CNN

Last week, one of the most important international banking organizations said it was preparing to ban blacklisted Iranian banks for their role in facilitating illicit financial transactions. Although existing international sanctions have placed significant pressure on Tehran, the United States and the European Union have the ability to render a knockout blow that would significantly curtail Iran’s access to the international financial sector.

The Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT, is a banking cooperative owned by its member financial institutions. It is used by banks around the world to debit and credit money. The vast majority of global interbank transfers are routed through the SWIFT network, and nearly every bank in the world uses SWIFT to move funds globally.  As of January 2011, SWIFT linked more than 9,500 financial institutions, in 210 countries and territories, and facilitated over 17 million transfers daily. SWIFT is headquartered in Belgium and has offices in the world’s major financial centers, including a very large presence in New York.

Iran relies heavily on SWIFT to move its funds and to finance its nuclear program, proliferate terrorism, and repress its own people. According to the organization’s own documentation, all of Iran's domestic banks are connected to SWIFT, and in 2010, they sent 1.16  million messages and received 1.1 million, each of which represents movement of money. As of February 2010, Iranian financial institutions, including branches, departments, and head offices, possessed 675 SWIFT codes, which act as unique identifiers and allows Iran to manipulate the global financial market.

As the international community implements robust sanctions against Iran, SWIFT has been in breach of the sanctions regime, along with U.S. and European laws. Beginning in 2007, the UN ordered member states to cease doing business under any circumstances with Iran’s Bank Sepah and its affiliates and also placed restrictions on two other Iranian banks, Melli and Saderat. Most recently, the UN designated the First East Export Bank, located in Malaysia, and Australia, Canada, and the EU have published a list of illicit Iranian banks. For its part, the United States has formally desig­nated those named at the UN, as well as another sixteen Iranian banks for their role proliferating weapons of mass destruction and terrorism.  The U.S. also blacklisted every Iranian bank specifically for engaging in money laundering.  All of the Iranian banks designated by the U.S. and Europe have SWIFT Codes.

SWIFT has even in violation of its own corporate rules, which clearly state that services “should not be used to facilitate illegal activities.” Furthermore, both the United States and Europe, by blacklisting Iranian financial institutions for their role in terrorism finance and money laundering, have provided SWIFT with sufficient reasons to prevent sanctioned Iranian banks from having access to the international financial sector.

Some might argue that SWIFT must provide unfettered access to everyone, since excluding any country, no matter how nefarious, would endanger access for all. Others will claim that powerful countries like the United States could use SWIFT as a political tool. Yet it is clear that Iran, by abusing its financial sector to help sponsor terrorism, achieve nuclearization, and facilitate criminal activity, has by any reasonable standard lost its right to move money freely around the globe.

SWIFT announced last Friday that 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.”  But because SWIFT has a presence in both the U.S and EU, it is subject to both jurisdictions’ laws, and therefore should cut off all blacklisted institutions.  Simply put, since all Iranian banks are engaging in criminal activity, SWIFT has the responsibility and the ability to cut off Iran and hamper its ability to abuse the international financial sector.

If Iran were denied access to SWIFT, its ability to finance illicit activities would be severely hampered. By providing designated Iranian financial institutions with direct access to international markets, SWIFT has facilitated Tehran’s actions. In recent years, international policymakers and legislators have not shied away from taking necessary steps against those who provide the Islamic Republic with the means to continue its march towards nuclearization. SWIFT must be made to understand that the same rules apply to it.

The views expressed in this article are solely those of Avi Jorisch.

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Topics: Iran

soundoff (22 Responses)
  1. Linda Swisher

    Use money (lack of) rather than weapons to civilize Iran. I give President Obama a lot of the credit for NOT taking us into more wars and, instead, developing the climate for creativity rather than killing.

    February 23, 2012 at 3:10 pm | Reply
  2. George Patton

    It looks like the right-wing thugs in Washington have yet another tool at their disposal against the Iranians, S.W.I.F.T. Now it appears that there's another tragedy in the making as the right-wing thugs increase their stranglehold over Europe. How revolting this is!!! Or how sad this is???

    February 23, 2012 at 3:18 pm | Reply
  3. Patriot

    This will not work as other sanctions have not. It will just make Iranians hate Americans/Jews more than they want to hate them.

    February 23, 2012 at 3:48 pm | Reply
    • 100% ETHIO STRONGER!

      Swift change Patriot, agreeable.

      February 23, 2012 at 4:55 pm | Reply
      • gogoman

        worms work better than bombs

        March 8, 2012 at 12:11 pm |
    • Marine5484

      Let's just hope that you're right about S.W.I.F.T., Patriot. One knows that the Iranians already have pleny of reaons to hate us as it is! They don't need more! What we need to do, on the other hand, is to sit down and negotiate with them.

      February 23, 2012 at 7:22 pm | Reply
      • Spelckr


        March 4, 2012 at 3:22 pm |
  4. j. von hettlingen

    The Al Qaeda people don't rely on banks, hence their transactions can't be traced. Of course a country needs to have bank accounts with the SWIFT in order to do transfers like paying for the imports and getting paid for its exorts. No doubt by puting Iran on the SWIFT blacklist, Iran won't be able to buy and pay, due to the lack of cash flow.

    February 23, 2012 at 5:31 pm | Reply
    • 100% ETHIO STRONGER!

      In Arab World, most of the Businesses are COD (Cash On Delivery).

      February 23, 2012 at 7:32 pm | Reply

    Not to make the Jews opponents pleased, but the old generations of Jewish were much better than the new generations. Whether Culturally, Psychologically, heroically and friendly.
    The true Jewish, the one I know historically, they are not around any more. They fought for the independence of Israel and beyond. Peace up on with them.

    February 23, 2012 at 7:27 pm | Reply
  6. Benedict

    If this works,then it will be a first.

    February 25, 2012 at 8:34 am | Reply
  7. Rational

    I think China and Russia will realize that SWIFT is another weapon at the desposal of western powers. A competing organization may be need to offset the dependens on SWIFT.

    February 26, 2012 at 9:14 am | Reply
    • Louise

      Totally agree, and no doubt Asia will obviously set up their own system which cannot be obstructed by the West. If the West can stop Iran from using SWIFT based on lies then they can do the same to other Asian countries as well.

      March 18, 2012 at 1:33 am | Reply
  8. Deryk Houston

    I believe that this kind of pressure is going to bring about war. Iran will have nothing left to lose but to strike while it still can. These tactics will only pressure Iran to make the decision to build a bomb...because no one would be making these threats if they had one.
    How does that make for a safer world for our children? It is madness.

    February 28, 2012 at 12:29 pm | Reply
  9. Zahid Khawaja

    WMD in Iraq. Saudi pilots bring down twin towers, US attacks Afghanistan (no pilots from there in 9/11). Now US, UK, EU all ganging up to squeeze Iran and maybe next is a war on unproven but suspected nuclear for weapons issue. Israel is the only undeclared nuclear weapon state in the Middle East. Remember 'necessity is the mother of invention'. The more we artificially restrict globally, the more new routes will open up for those we restrict. That has been the past experience. Let better sense prevail.

    February 29, 2012 at 2:09 am | Reply
    • Louise

      Asian countries know that the world has passed peak oil and that the US simply wants to control the world's oil supply because then it will control the world. Asian countries are not buying into the US/Israeli lies for very good reason.

      March 18, 2012 at 1:35 am | Reply
  10. Duck Duck Duck - GOOSE

    It has worked before.
    The Soviet Union collapsed because the world banking system
    sucked billions of dollars out of thier economy.
    Remember, those who have the money, make the rules.

    March 3, 2012 at 11:31 am | Reply
  11. Stlchicago

    Can we take the same action against the Koch brothers? Probably not, but it's a thought. Boycott the Koch products:

    Koch Industry Gasoline: Chevron, Union, Union 76, Conoco
    Kock Industry/Georgia-Pacific Products: Angel Soft Toilet Paper, Brawny Paper Towel, Dixie, Mardi Gras Napkins and Cups, Quilted Northern Toilet Paper, Soft n Gentle Toilet Paper, Sparkle Napkins, Vanity Fair Napkins, Zee Napkins.

    March 4, 2012 at 5:02 pm | Reply
  12. JR Bradshaw

    An instantaneous advance loan regardless of low credit score is tough to find ! no much more, like a customer having a appear collateral to release always has a better chance regarding attaining quick cash ...ak dostac Kredyt w Uk

    March 5, 2012 at 11:09 am | Reply
  13. skjx9w2

    Po drugie zwróćmy uwagę na historie banku który musi mieć ufność publiczne a jest na rynku bankowym w tej chwili od dłuższego czasu. Należy odszukać taki kredyt, kredyt na dowód który będzie posiadał niskie raty przy jego spłacaniu i przede wszystkim na niskie oprocentowanie.kredyt bez bik

    August 31, 2013 at 11:25 am | Reply

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