[original article in Econews]
The P5+1 have finally agreed on the terms of their nuclear agreement, which will also see the end of international sanctions. However, the lifting of some sanctions are prohibited for three years. The Society for Worldwide Interbank Financial Telecommunication, known as SWIFT has cut off [over] ten major Iranian banks access to their communication system of 10,500 institutions for the use of transferring money.
Not having access to SWIFT, for Iranian banks and the Iranian citizens, in order to send and receive money from abroad has been difficult and has damaged trade and investment as well as hindered the monetary transfer routes.
Ardavan Amir Aslani, a lawyer based in Paris who analyzes the sanctions for major French companies who want to return to Iran, said: “access to SWIFT is a fundamental problem for Iran. It has become impossible to make SWIFT transfers in or out of Iran with this ban.” He added that the question many customers ask is whether they will be able to send or receive money from Iran. With so many questions, the simple answer is time, because sanctions will not be lifted until the IAEA confirms that Iran has obliged to the agreement. According to Ernest Moniz, the US Secretary of Energy, this process may take six months.
The Society for Worldwide Interbank Financial Telecommunication is an independent entity in Belgium which in 2012 cut off access for Iranian banks – including the Central Bank – in compliance with the provisions of the EU sanctions. As a result, Iran became the first country to be denied access to the SWIFT communication system due to financial sanctions.
This [even] resulted in the Iranian companies and banks, who were cooperative and were not directly under the sanctions, to experience great difficulty in dealing with foreign banks because the latter was concerned about repercussions from the sanctions in place by the United States. Foreign companies who conduct their transactions with the US dollar do not want to violate these restrictions, especially after the French bank BNP Paribas was fined $9B for violating the sanctions on Iran, Cuba and Sudan.
According to Bloomberg, the implementation of European sanctions in 2012, which included forcing SWIFT to cut off Iranian banks to their services, had the aim to help European countries. However, according to European statistics, EU imports from Iran fell from 17B Euros in 2011 to 1.2B Euros in 2014. Also, exports to Iran fell by 40% to 6.4B Euros.
SWIFT, who describes itself has an unbiased independent entity for its members, stated that it only complied with the European provisions to stop Iranian banks’ access to its services. Leonard Schrank, former CEO of SWIFT said: “I do not use SWIFT as a political weapon, however in this instance I believe it was used for this purpose.”
In order for Iranian banks to re-enter the SWIFT system Federica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy, must propose a change to the EU sanctions in place. Then the Council of the European Union, which represents the governments in the EU, will review and have to agree on Ms. Mogherini’s proposed changes. Once approved, the sanctions will be lifted only after the official EU journal is published. This process may take days, weeks or months depending on the political will of the European nations.
Representatives from the Society for Worldwide Interbank Financial Telecommunication have told officials from the US Department of Treasury that if Iranian banks want to regain access to SWIFT they must submit a request and also update their computer software and hardware in compliance with SWIFT security standards.
According to this report, the application process for joining SWIFT is very difficult for new applicants, which includes the submission and approval of financial documents, information on local authorities, and filing digital documents.