SWIFT Suspends Services to Several Iranian Banks

SWIFT, the most important international money transfer network, announced on Monday, November 5, coinciding with the implementation of the second wave of U.S. sanctions, that it would suspend services to several Iranian banks. In a statement, SWIFT said: "In line with our duty to maintain the integrity of the international financial system as a global and neutral service provider, we are suspending access to this network for a number of Iranian banks." The statement further noted: "This regrettable action is taken to preserve the integrity and stability of the international financial system." SWIFT, whose full name is the Society for Worldwide Interbank Financial Telecommunication, is a secure messaging network for transferring money between banks globally. Without this company's services, transactions for Iranian banks, even with clients willing to do business with Iran despite U.S. sanctions, will become more difficult. After the nuclear agreement between Iran and world powers in 2015, some sanctions against Iranian banks and the oil industry were lifted. However, following the U.S. withdrawal from the JCPOA on May 8 of this year, these sanctions were re-implemented on Monday. U.S. Secretary of State Mike Pompeo announced that with exemptions granted to eight countries, they would be allowed to temporarily continue purchasing oil from Iran, but aside from these cases, U.S. pressure on Iran would be "relentless." According to these sanctions, if Washington determines that foreign banks and companies have violated the sanctions regulations in transactions with Iran, they will be punished. At the same time, SWIFT is under pressure from the U.S. to comply with the new sanctions. SWIFT connects over 11,000 banks and financial institutions in 200 countries and has always claimed to be politically neutral. The company does not hold or manage customer assets but enables secure money transfers by sending messages between banks. In its statement on Monday, SWIFT did not mention the U.S. sanctions against Iran, but this decision was likely influenced by the onset of the second wave of Washington's sanctions against Iran. The U.S. government, upon exiting the JCPOA, stated that by resuming nuclear sanctions against Iran, it intends to pressure Tehran regarding its nuclear program, missile activities, and interference in regional countries' affairs. SWIFT's failure to mention U.S. sanctions indicates that the company is caught between two conflicting control systems. On one hand, the U.S. has demanded that the company comply with the sanctions, or it will face sanctions itself. On the other hand, as a European company and under EU laws, it may be penalized for complying with unilateral U.S. decisions.