SWIFT planned the cutoff for several days, having come under pressure from the US to do so. Treasury Secretary Steven Mnuchin said that the move is “the right decision to protect the integrity of the international financial system," RT reported.
Last week, SWIFT said that it would begin cutting off access to several unspecified Iranian banks. More than 70 Iranian and Iranian-linked financial institutions were sanctioned.
While the US could not directly force SWIFT to cut off Iranian banks, US Secretary of State Mike Pompeo had warned that penalties would be applied to firms that refused to comply with the latest sanctions.
A neutral entity, SWIFT had found itself torn between a US-EU diplomatic row as of late. Scrambling to save the 2015 Joint Comprehensive Plan of Action (JCPOA), or Iran deal, EU leaders enacted a ‘blocking’ law in August, prohibiting firms operating in the bloc from complying with the US sanctions.
Now, in siding with Washington, SWIFT, which is based outside Brussels, may face penalties in Europe.
Meanwhile, European leaders are planning on introducing an alternative system to ensure that payments to and from Iran can be processed. Such a system will not be ready for several months at least, and Iran’s deputy foreign minister Kazem Sajjadpou expressed frustration last week with the delay, saying “what is lacking is both speed and efficiency.”
