* SWIFT says awaits clarity regarding EU legislation
* U.S. says will continue to pressure EU on SWIFT
* SWIFT general counsel to meet US lawmakers next week
By Philip Blenkinsop and Rachelle Younglai
BRUSSELS/WASHINGTON Feb 17 Belgium-based
SWIFT, which provides banks with a system for moving funds
around the world, bowed to international pressure on Friday and
said it was ready to block Iranian banks from using its network
to transfer money.
Expelling Iranian banks from the Society for Worldwide
Interbank Financial Telecommunication would shut down Tehran's
main avenue to doing business with the rest of the world - an
outcome the West believes is crucial to curbing Iran's nuclear
SWIFT, which has never cut off a country before, has been
closely following efforts in the United States and the European
Union to develop new sanctions targeting Iran that would
directly affect EU-based financial institutions.
The United States and EU have already moved to sanction
Iran's central bank.
"SWIFT stands ready to act and discontinue its
services to sanctioned Iranian financial institutions as soon as
it has clarity on EU legislation currently being drafted," the
company said in an emailed statement.
The United States has been pushing the European Union to
force SWIFT to evict the Iranian firms but it was unclear
whether the EU would reach an agreement.
For one, SWIFT's home country, Belgium, does not think the
global banking firm should be the only company of its kind
required to comply with sanctions.
The Obama administration said it welcomed SWIFT's intention
to stop transactions involving designated Iranian banks. "We
will continue to be in contact with our EU partners to urge
action on this issue," a U.S. Treasury official said.
SWIFT, with headquarters just outside the Belgian capital
Brussels, is vital to international money flows, exchanging an
average 18 million payment messages per day between banks and
other financial institutions in 210 countries.
The United States and Europe accuse Iran of seeking to
develop nuclear weapons. Iran maintains its nuclear program is
for peaceful purposes.
The United States recently enacted sanctions that would
punish countries and institutions if they do not reduce their
purchases of Iranian oil by mid-year.
One of the lawmakers who has pushed for the sanctions said
she was pleased SWIFT would move to cut Iran out of the global
banking system, but said the United States needs to ensure it
enforces all its sanctions laws.
"In addition, we must sanction Chinese energy companies that
throw Iran an economic lifeline by continuing to do business as
usual," said Ileana Ros-Lehtinen, the Republican chairman of the
House of Representatives Foreign Affairs Committee.
The National Iranian American Council, an advocacy group,
criticized efforts to expel Iranian firms from SWIFT.
"Kicking Iran out of SWIFT is both unprecedented and another
dangerous step toward turning a financial war into a military
conflict," said Reza Marashi, the council's research director.
Nineteen banks and 25 affiliated institutions from Iran sent
and received some 2 million messages in 2010. They included
banks the U.S. accuses of financing Iran's nuclear program or
terrorism - Mellat, Post, Saderat and Sepah.
SWIFT, founded in 1973, said its decision reflected the
extraordinary circumstances of international support for the
intensification of sanctions against Iran.
The company said it had informed its regulators, the world's
largest central banks, of its decision.
SWIFT's general counsel is slated to visit Washington next
week to meet with lawmakers who have proposed new sanctions
targeting its services.