The SWIFT global financial transaction service said Thursday that it was cutting ties with Iranian banks that are subject to European Union sanctions aimed at discouraging the country from developing nuclear weapons. The action effectively enforces EU sanction because the world’s financial transactions are impossible without using SWIFT, and it will go a long way toward isolating Iran financially.
The company’s name stands for Society for Worldwide Interbank Financial Telecommunication. It is a banking hub crucial to oil, financial transactions and other trades.
In a statement, SWIFT said the EU decision “prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks.”
“Disconnecting banks is an extraordinary and unprecedented step for SWIFT,” Lazaro Campos, chief executive of SWIFT, said. “It is a direct result of international and multilateral action to intensify financial sanctions against Iran.”
In addition to sanctioning various officials and freezing the assets of certain companies, the European Union plans to institute an embargo on the import of Iranian oil in July – an attempt to choke off funding for Iran’s nuclear program.
The EU sanctions are aimed at forcing Iran to demonstrate to the international community that it is not trying to develop nuclear weapons. Iran says that its nuclear program is for peaceful purposes only, but officials in many other countries – including Israel – believe otherwise.