The Arabist

The Arabist

By Issandr El Amrani and friends.

Sanctions on Iran banking get much tighter

Swift, a Banking Network, Agrees to Expel Iranian Banks -

It is the first time that Swift, a consortium based in Belgium and subject to European Union laws, has taken such a drastic step, which severs a crucial conduit for Iran to electronically repatriate billions of dollars’ worth of earnings from the sale of oil and other exports.

Advocates of sanctions against Iran welcomed the action by Swift, which takes effect on Saturday, according to a statement on the network’s Web site. The statement said that Swift had been “instructed to discontinue its communications services to Iranian financial institutions that are subject to European sanctions.”

Lázaro Campos, Swift’s chief executive, said in the statement that “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.”

After the closure of a major bank doing business with Iranians in Dubai, the financial sanction noose is tightening... This is a major step, which will make all sorts of transactions (not just oil related ones) very difficult.