Iran's banks to be blocked from the global financial system

[Caelius]

The slow implosion of the Iranian economy just turned into a headfirst nose-dive.

There are of course ways that the Iranians will be able to make transactions and carry out other purchases and activities outside of the global financial network, but the sheer amount of financial and economic attrition a move like this induces is practically a death knell for long term economic progress or advancement.

Source

Swift, the body that handles global banking transactions, says it will cut Iran's banks out of the system on Saturday to enforce sanctions.

The move will isolate Iran financially by making it almost impossible for money to flow in and out of the country via official banking channels.

It will hit its oil industry, but may also have a heavy impact on Iranians who live abroad and send money home.

The move follows EU sanctions against Iran over its nuclear programme.

The US and its allies accuse Iran of trying to develop nuclear weapons - a charge it denies.

Iran last week agreed to hold talks with six major world powers over its nuclear programme, although no date or venue has been set.

Almost all banking transactions pass through Belgium-based Swift, the Society for Worldwide Interbank Financial Telecommunication, which is sometimes called the "glue" that holds the financial system together.

Swift will pull the plug at 1600 GMT on Saturday, in what is all but the final blow to Iranian business dealings.
Oil

Its announcement coincides with news that major money exchange houses in the nearby United Arab Emirates have stopped handling Iranian rials over the last few weeks, something that has further reduced Iran's ability to trade and acquire hard currency.

Iran's business activities had already been restricted by US anti-money laundering legislation which made it risky for banks around the world to do business with Iran, including trade financing.

It is heavily reliant on its oil industry.

China and India have said they will still take Iranian oil, but the only obvious way for Iran to be paid for it is now in gold.

One Iranian businessman said Swift's move would make it now impossible to conduct business with Iran.

Morteza Masoumzadeh, a member of the executive committee of the Iranian Business Council in Dubai and managing director of the Jumbo Line Shipping Agency, told the Reuters news agency: "If Iranian banks cannot exchange payments with banks around the world then this will cause the collapse of many banking relations and many businesses."

Lazaro Campos, chief executive of Swift, said: "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."

[shumit]

this very unfortunate.. there are no proof that iran is building the bomb but they are still hurting them.

israel on the other hand has nukes... why should they have it but not iran?

[Savoyard]

this very unfortunate.. there are no proof that iran is building the bomb but they are still hurting them.

israel on the other hand has nukes... why should they have it but not iran?

Better question: Why do the Saudis, who don't even let women drive and numerous human rights abuses (Certainly more than Iran), get to be a US ally?

[shumit]

Better question: Why do the Saudis, who don't even let women drive and numerous human rights abuses (Certainly more than Iran), get to be a US ally?

because the US actually doesn't care about human rights.. but only for their own interests ONLY.

[Rome101]

this very unfortunate.. there are no proof that iran is building the bomb but they are still hurting them.

So I guess you have more reliable resources than the UN and the IAEA? Because these two determined, after long research and through detailed, documented articles and through satellite images, that Iran is indeed having experiments with nuclear weaponry.

[shumit]

So I guess you have more reliable resources than the UN and the IAEA? Because these two determined, after long research and through detailed, documented articles and through satellite images, that Iran is indeed having experiments with nuclear weaponry.

Sources?

Show me sources for both UN and iaea determining that they are building weaponry.

[YukonTrooper]

So I guess you have more reliable resources than the UN and the IAEA? Because these two determined, after long research and through detailed, documented articles and through satellite images, that Iran is indeed having experiments with nuclear weaponry.

No, you're wrong. The UN and IAEA have never said anything conclusively. They've said there is evidence that Iran "may" be developing weapon technology "related" to nuclear development. In other words, they know absolutely nothing.

[Thorn777]

sad day for america

[Pontifex Maximus]

sad day for america

Sad day for Iran.

Anyway, I find it funny anyone here considers this action outrageous in terms of American responses to potential nuclear threats. It could be worse, much, much worse.

[Thorn777]

because they bend over for $

[OG Grenadier]

I guess this means "E"ran just got non surgically removed from the global market... this can only be resolved by a full scale boots on the ground invasion. Air power will not be capable of eliminating the "nuclear capability". Israel has conceded this.

Everybody knows whats coming. Syria is a diversion of world attention from the real threat of "E"ran.

[Savoyard]

I guess this means "E"ran just got non surgically removed from the global market... this can only be resolved by a full scale boots on the ground invasion. Air power will not be capable of eliminating the "nuclear capability". Israel has conceded this.

Everybody knows whats coming. Syria is a diversion of world attention from the real threat of "E"ran.

"E"ran?

[Phier]

Teeth in international sanctions?

Interesting...berry interesting.

[Snoopy]

Because this isn't going to have any negative effects on the world's oil supply and potentially ruin the economies of the countries "blocking" Iran

[Thorn777]

Because this isn't going to have any negative effects on the world's oil supply and potentially ruin the economies of the countries "blocking" Iran

A country like Greece maybe indeed, but on the other hand its great for them companies interested in keeping the price above 100$ a barrel despite global recession.

@caelius

Its been a sad day for the EU long ago. The day we've bend over indefinitely. Dealing with continual pounding in our rear since then. Euro crisis is a great example. But what do you have to know about economics when you can pillage and extort.

[Caelius]

israel on the other hand has nukes... why should they have it but not iran?

Israel never signed the Nuclear Non-Proliferation Treaty. Iran did.

But I don't think you care about that so me restating that important fact probably doesn't matter.

sad day for america

Sad day for the EU you mean....seeing as how this move is a direct result of European sanction measures against Iran.

But yeah...keep perpetuating that it's only the US that's opposed to the Iranians on this.

Better question: Why do the Saudis, who don't even let women drive and numerous human rights abuses (Certainly more than Iran), get to be a US ally?

Because its in US interests to do perhaps?

That question is so naive, it's like asking: Why does China get to treat Tibet like ? Why do they support states like N. Korea and Myanmar? Why do Russia and China veto a UNSC Resolution that essentially lets Bashar al-Assad kill his own people without consequence?

[Savoyard]

Because its in US interests to do perhaps?

That question is so naive, it's like asking: Why does China get to treat Tibet like ? Why do they support states like N. Korea and Myanmar? Why do Russia and China veto a UNSC Resolution that essentially lets Bashar al-Assad kill his own people without consequence?

It was a rhetorical question that shows how wrong our entire foreign policy is.

[shumit]

Yea Iran did sign the unbelievably unfair treaty. Israel didn't. But there was immense pressure on Iran to sign it. But no pressure on Israel. What would happen if Iran refused to sign? There would be further sanctions.

America it self is not following the so called treaty. They are supposed to reduce their nuke arsenal towards 0. How many did they reduce last year? These bulshit treaty doesn't make the oppression right.

USA should first reduce their own nukes, then try to police the world.

Also.. npt does not prohibit achievement of breakout capabilities. Ie. Capabilities to build nukes off war ensues. Thus Iran is not violating npt since they didn't build nukes yet.

Npt states that in case of war signatory countries CAN build nukes. Iran is just getting ready.

npt also says it is the inalienable right of every nation to pursue civilian nuclear power.

NATO forces have nukes in country which are not supposed to have nukes and are signatory countries. Isn't THAT a breach?

[Azog 150]

Israel never signed the Nuclear Non-Proliferation Treaty. Iran did.

But I don't think you care about that so me restating that important fact probably doesn't matter.

I hear this argument a lot. But wasn't it the Imperial State of Iran under the Shah that signed the NPT and not the Islamic Republic of Iran? Both very different and distinct entities- the Shah and his regime that signed the treaty have ceased to exist.

Now there are plenty of reasons to oppose Iran's nuclear ambitions, I just don't think the NPT which the Iranian regime never signed is one of them.

[mrmouth]

Teeth in international sanctions?

The lastest tidbit is that based on long running analysis, both Israel and the US have agreed that the Ayatollah did indeed call of the nuclear weapons campaign, very recently. Just as he did previously, in 2003. And as they started it back up again, we shouldnt think that is the end of it. But the Ayatollah was the voice of reason then, as in now. So we have a better idea of how the power struggle looked like, and that Khamenei was victorious.

That said, now that sanctions have finally shown bite, because everyone cooperated, we are likely to not loosen them, and make Iran an example. And of course as long as Iran is in the state of mind where they would hold the world hostage with threats over an international shipping lane, they probably shouldn't be treated any better.