Wednesday

31st Aug 2016

EU orders Belgian-based firm to halt Iran bank transfers

  • Swift computers at work. A statement by the US treasury "commended" the EU for its actions (Photo: SWIFT)

The Belgium-based firm which handles international wire transfers, Swift, has said it will block transactions by all EU-sanctioned Iranian banks at 5pm Brussels time on Saturday (17 March).

"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 company's CEO, Lazaro Campos, said in a statement.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

EU countries ordered Swift to act earlier on Thursday, following pressure from the US, Iran's main antagonist on the world stage.

Its decision became EU law when it was published in the Official Journal on Friday, which said: "It shall be prohibited to supply specialised financial messaging services, which are used to exchange financial data, to the persons and entities referred to in [previous EU sanctions decisions]."

A statement by the US treasury "commended" the EU for its actions, with a special mention for "prompt action" by the Belgian treasury. "Substantially increased pressure is needed to convince the Iranian regime to address the international community’s concerns about its illicit nuclear activities," a US treasury official responsible for counter-terrorism, David S. Cohen, noted.

According to Swift's latest public figures, 19 Iranian banks and 25 related institutions in its system in 2010 sent and received some 2.3 million financial "messages" relating to wire transfers.

The company in total handles $6 trillion of transactions a day worldwide. It had earlier pleaded that EU sanctions should not stop it doing business with designated firms because it first needed to hammer out "the right multilateral legal framework" to address the issue.

For her part, Maja Kocjancic, an EU foreign relations spokeswoman, confirmed that the Swift ban concerns Iranian banks only, but not Syrian banks, which are also on an EU blacklist.

The Iranian banks to be hit by the freeze include the Central Bank of Iran, Bank Tejarat, Onerbank, First East Export Bank, Bank Mellat, the Export Development Bank of Iran, Bank Saderat Iran, Future Bank, Mehr Bank, Bank Melli, Arian Bank, Assa Corporation, Bank Kargoshaie, Bank Refah, Europaisch-Iranische Handelsbank, Export Development Bank of Iran, Post Bank and Bank Sepah.

Most of them are based in Tehran, but the network of subsidiaries and affiliates stretches also to Bahrain, China, Germany, Malaysia and the UK.

EU documents accuse Bank Tejarat, for instance, of helping the country to buy yellowcake uranium. They say Bank Melli "facilitated numerous purchases of sensitive materials for Iran's nuclear and missile programmes" by opening letters of credit and hosting accounts.

The EU sanctions themselves contain loopholes, however.

Member states can still do business with the Iranian central bank if it relates to trade in non-nuclear and non-oil-related items, such as food or textiles, and if they make sure the money does not go to any regime officials on the EU's blacklist - not easy to prove given the opaque nature of the administration.

With several EU countries using Bank Tejarat to finance their diplomatic missions in Tehran, the bank can still handle their money "in so far as such payments are intended to be used for official purposes of the diplomatic or consular mission or international organisation."

Stakeholders' Highlights

  1. EBECBright Engineering Students Designed the Future, Today at the BEST Competition
  2. Access NowInternet wins! Net Neutrality Victory in EU
  3. EuridThe 2016 .eu Web Awards is a Chance to Make Dreams Come True so Vote Today !
  4. Nordic CouncilNordic-Baltic Co-operation Vital in Turbulent Times
  5. GoogleBrussels: Home of Beer, Fries, Chocolate and Google’s Policy Team - follow @GoogleBrussels
  6. HuaweiSeeds for the Future Programme to Bring Students to China for ICT Training
  7. EFASpain is Not a Democratic State. EFA Expresses Solidarity to A. Otegi and EH Bildu
  8. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  9. HuaweiMaking Cities Smarter and Safer
  10. GoogleHow Google Makes Connections More Secure For Users
  11. EGBAThe EU Court of Justice Applies Proportionality in Assessing Gambling Laws
  12. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests

Latest News

  1. Verheugen went off-script in VW cheat testimony
  2. Poland may remove constitutional judges
  3. Spain's Rajoy faces uphill battle to win MPs' support
  4. Russia and Turkey restart talks on EU gas pipeline
  5. MEPs call for reconciliation with Turkey
  6. Egypt blames EU-Turkey deal for refugee spike
  7. EU dithering aggravated refugee crisis, Merkel says
  8. Verheugen did not think VW cheating was morally possible