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article imageSWIFT cuts interbank services to Iran on orders of EU Council

By Anne Sewell     Mar 15, 2012 in World
Brussels - The Brussels-based transaction provider, SWIFT, has announced that it has been instructed to cut services to Iranian financial institutions that are subject to EU sanctions, to comply with the EU Council directive.
RT reports that the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is crucial to Iran’s oil and other trade.
In terms of the sanctions being applied to Iran, the EU Council decision prohibits companies like SWIFT from continuing to provide financial message services to banks in Iran that are EU-sanctioned.
SWIFT, along with its customer community have been notified of the disconnection, which will become effective on Saturday 17 March 2012 at 16.00 GMT.
On the SWIFT website the statement reads:
“This EU decision forces SWIFT to take action” said Lázaro Campos, CEO of SWIFT. “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.”
The EU Council has already imposed asset freezes and other restrictions on a number of organizations and people associated with Iran's nuclear activities. The ban by SWIFT increases the pressure, aiming to persuade Iran to drop its nuclear program.
It is hoped that this move might also buy time for the U.S. to dissuade Israel from launching a pre-emptive military strike on Iran.
It is believed by some that this plan might actually backfire and that it could send oil prices soaring and undermine SWIFT’s reputation.
The Brussels-based organization is a banking hub used by virtually every nation and corporation around the world but is also forced to abide by EU Council decisions.
The SWIFT website further states: "SWIFT has been and remains in full compliance with all applicable sanctions regulations of the multiple jurisdictions in which it operates, and has received confirmation of this from the competent regulatory authorities. As a global provider of secure messaging services, SWIFT has no involvement in or control over the underlying financial transactions that are contained in the messages of its member banks."
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