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Iran was effectively cut off from global commerce on Thursday, when the company that handles financial transactions said it was severing ties with many Iranian banks _ part of an international effort to discourage Tehran from developing nuclear weapons.
The action enforces European Union sanctions because global financial transactions are impossible without using SWIFT, and it will go a long way toward isolating Iran financially.
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a banking hub crucial to oil, financial transactions and other trades.
"Disconnecting banks is an extraordinary and unprecedented step for SWIFT," said Lazaro Campos, chief executive of SWIFT. "It is a direct result of international and multilateral action to intensify financial sanctions against Iran." ....
"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 Associated Press quoted SWIFT CEO Lazaro Campos as saying on Thursday.
The Financial Times described the service as "one of the key bits of plumbing in the world’s interbank payment systems," adding that 30 Iranian banks will be cut off from the service as of Saturday, March 17. ...
Despite tightening sanctions, some analysts have noted that Iran is still able to skirt the sanctions in a few ways. The country, they say, may exchange oil for cash, gold or other commodities directly. Also, Iranian banks that have not been targeted by EU sanctions can still sell oil.
"Throughout the history of the oil trade, someone always gets around trade embargoes one way or another," said Jim Ritterbusch, a veteran oil trader and analyst.
SWIFT is a clearing system, which oversees the network used by most of the world's largest banks to conduct financial wire transfers.