EU prepares for new sanctions against Iran

The European Union is moving to ban blacklisted Iranian entities from using a Belgium-based financial communications and clearing system in a move that will drastically cut Tehran's ability to conduct global financial transactions, according to senior U.S. and European officials, The Wall Street Journal reported.

The system, known as the Society for Worldwide Interbank Financial Telecommunication, or Swift, oversees the network used by virtually all the world's largest banks to conduct financial wire transfers.

American lawmakers have charged in recent weeks that Iranian companies and banks blacklisted by the U.S. and EU have been using Swift to evade international sanctions.

Both houses of the U.S. Congress have drafted legislation threatening to penalize Swift's board and owners if they didn't ban the suspect Iranian entities from using its network.

A formal ruling by EU financial regulators on Swift is expected by late February or early March, according to European and U.S. officials. Swift's board is expected to comply, according to these officials.

"Yes, [it's a] done deal," said a European official. "[It] should be explicitly confirmed by the end of February, early March."

Swift has sent a number of lawyers to Washington in recent weeks to discuss the new American legislation, according to congressional staffers. And the Treasury Department's point man on sanctions against Iran, David Cohen, visited Brussels earlier this month to discuss the Swift case, according to U.S. officials.

Earlier this month, Swift released a statement stating: "We are working with U.S. and EU authorities...to find the right multilateral legal framework which will enable Swift to address the issues."

According to Swift's public records, many of Iran's largest banks, which have been sanctioned by the U.S. and EU, have continued to use the Swift system in recent months. These include: Banks Sepah, Saderat, and Mellat.

Congressional officials said they're not certain if the new EU regulations will also ban Iran's central bank from using Swift. Banning Bank Markazi would almost completely freeze Iran out of the global banking system, they said.


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