A former Treasury Department official said Iran is still receiving financial transactions from the Society for Worldwide Interbank Financial Telecommunications (Swift) despite international sanctions in a Tuesday Wall Street Journal op-ed.
Swift functions as "an interbank messaging system for crediting and debiting accounts," wrote Avi Jorisch, now a senior fellow for counterterrorism at the American Foreign Policy Council.
All Iranian financial institutions depend on Swift "to move funds globally." Thus far, the European Union (EU) has only blacklisted 14 or Iran’s 30 banks for illegal activity and terrorism.
The United States has blacklisted all 30 Iranian banks "for deficiencies present in the anti-money-laundering systems of the Islamic Republic of Iran."
Swift, however, has barred only the 14 banks blacklisted by the EU, leaving the other Iranian banks free to work within the global financial system. This is a clear violation of Swift's own corporate rules, which state that services "should not be used to facilitate illegal activities." Moreover, given Swift's large physical presence in New York and its business dealings in the U.S., there are strong legal grounds to argue that it is subject to U.S. law, which would mean it is violating that as well. […]
In Europe, Swift is adhering to the letter of the law by cutting off service to the 14 Iranian financial institutions on the EU blacklist. But the impact is blunted because those Iranian banks not on the list retain access to the Swift network and provide their blacklisted counterparts entree to the international financial system through correspondent services. The symbiotic relationship of the Iranian government and its banking sector enables the regime to maintain access to foreign currencies and markets by exploiting the banks that continue to use Swift.
Jorisch suggested the United States and European Union demand Swift stop doing business with Iranian banks. He said it is the best way to foil the Islamic Republic’s "quest for nuclear weapons."
Additionally, he said the European Central Bank should serve a banking advisory that says, "all Iranian banks are engaging in money laundering and other illicit behavior" because it would give Swift the push to stop working with all 30 Iranian banks.