News24

Iran cut off from global financial system

2012-03-16 13:12

Brussels - Dozens of Iranian banks were blocked from doing business with much of the world as the West tightens the financial screws on a country it wants to prevent from developing nuclear weapons.

The Belgium-based company that facilitates most international bank transfers on Thursday took the unprecedented step of blocking 30 Iranian banks from using its service. The move is likely to hurt Iran's all-important oil industry and make it difficult for citizens to receive money from relatives living abroad.

The move by the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is part of a broader effort by Western nations to isolate Iran financially and force it to demonstrate 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 believe otherwise.

SWIFT said it was forced by recent European Union sanctions to discontinue service to the Iranian banks beginning Saturday. SWIFT is a secure private network used by nearly every bank around the world to send payment messages that lead to the transfer of money across international borders.

The chief executive of SWIFT, Lazaro Campos, described the move as "extraordinary and unprecedented."

"It is a direct result of international and multilateral action to intensify financial sanctions against Iran," he said.

There was no immediate reaction from the Iranian government or the banks involved. Not all Iranian banks are subject to EU sanctions, and oil experts say there will be ways for Iran to sell oil without using SWIFT.

Still, blocking Iranian banks' access to SWIFT is "tightening the noose" on Iran, said Ali Ansari, an expert on the Middle East at the London-based Chatham House think tank.

Nuclear talks

Sanctions long in place have failed to convince Iran to return to nuclear talks; the EU, which imports about 14 percent of Iran's oil, plans to institute an embargo on Iranian oil in July.

The regime has been able to withstand these sanctions in part because high global oil prices have provided Iran, the world's third largest exporter, with record oil revenues. Iran exports 3.5 million barrels of oil per day, about 4 percent of the oil consumed in the world. Last year, Iran generated $100bn in revenue from oil, up from $20bn a decade ago, according to IHS CERA, a consulting firm.

Iran is expected to continue to sell to India, China and other major oil customers that are not participating in the EU embargo.

But by forcing SWIFT to expel Iran, Western nations are trying to make it more difficult for Iran to sell oil even to willing customers. A single oil tanker can hold $100m worth of oil, making electronic bank transfers crucial.

Analysts expect Iran to try to skirt the sanctions in a few ways. It may exchange oil for cash, gold or other commodities directly. It may try to mingle its oil with oil from other countries in international terminals and pipelines to mask its origins. It could get help from the central banks of countries friendly to Iran.

"Throughout the history of the oil trade, someone always gets around trade embargoes one way or another," said Jim Ritterbusch, a veteran oil trader and analyst.

Also, Iranian banks that have not been sanctioned by the EU could sell oil.

Analysts say by reducing the number of customers for Iranian oil and making it more difficult to pay, Iran will be forced to accept a lower price for its oil and likely be unable to sell all that it hopes to.

Judith Dwarkin, chief energy economist at ITG Investment research, said Spain and Japan are already reducing Iranian imports and Europe's large oil companies have also cut back ahead of the July deadline. Iranian oil shipments have already slipped in recent months. In February they fell to a 10-year low, according to the International Energy Agency.

Real bite


Saudi Arabia has said it would increase production to make up for any shortfall resulting from the sanctions. Still, analysts say that will likely drive up prices because it will reduce the amount of wiggle room — called spare capacity in the industry — that the world's oil producers have to make up for shortfalls elsewhere.

Oil markets were largely unaffected by Thursday's announcement; traders had already pushed prices higher in recent weeks in anticipation that Iranian supply would be disrupted. Analysts say these worries have made oil $10 to $20 per barrel more expensive than they otherwise would be. In New York. Oil settled at $105.11 per barrel on Thursday.

Washington and allies Britain, France and Germany have taken a tough approach toward Iran over the nuclear issue but have run into resistance from Russia and China. The six nations have agreed to meet with Iran to negotiate a solution, but East-West disagreements within the group are greater than ever. Talks between the seven nations ended in failure more than a year ago in Istanbul, Turkey.

SWIFT facilitates not only large bank-to-bank transfers, but small ones as well, which could lead to unintended consequences. Many Iranians, including opponents of the current regime, live abroad and send small amounts of money to their families in Iran back home on a regular basis.

Mark Wallace, a former US ambassador to the United Nations who heads a group called United Against Nuclear Iran, wants all Iranian banks to be included in the sanctions.

"We should not be allowing any Iranian banks access to the international markets," he said. Still, he said, the sanctions are already having "real bite", by crimping oil exports, leading the devaluation of Iranian currency, and making it harder for companies and Iranian elites to move money.

"The Iranian banking system is embattled," he said.

Comments
  • goyougoodthing - 2012-03-16 13:41

    Hmm, the coincidence here is huge. Firstly why not do it to Zimbabwe and secondly, the bankers control the world, it's pretty obvious to see it. Even Fred may have to agree.

      Jaba - 2012-03-16 14:27

      1) Zimbabwe has not threatened any other member of the UN with annihilation. 2) Zimbabwe is not trying to acquire nuclear weapons to complete the point above. However I do agree that sanctions should be placed on Zim until democracy takes place, for it is apparent that the Zanu PF does not have majority support, only fabricated elections.

      allcoveredinNinjas - 2012-03-16 16:34

      Zim's top brass is sanctioned.

      Fred - 2012-03-16 17:07

      We need a strong international alliance across cultures and religions that encounter the rogue regimes across the world and say no more.

      Xboxs - 2012-03-16 17:24

      Sanctions will hurt ordinary zimbabweans more than it would hurt the politicians.Sanctions at this stage against Zimbabwe is a nothing short of genocide.

      bluzulu - 2012-03-16 19:46

      Unfortunately for Mugabe and his henchmen Zim ain't got no Oil worth fighting for. However history shows that the west has destabilized the Arab world since the second world war. They put Saddam, Qaddafi and other Arab dictators in place with their arms and ammunition. As soon as these guys get to big for their bots and started thinking for themselves they become enemies of the world. we fought so hard for a democratic sovereign state nevertheless here we are pandering to the West and China (Dali Lama saga).Just like in Nazi Germany , first they came for the Jews and everybody stood by watching, Then they came for the Catholics and everybody stood by watching, then the communist and so on. When the West is done with the Arabs ...WHO'S NEXT?

      bluzulu - 2012-03-16 19:47

      bot=boots,,,sry

      Fred - 2012-03-16 21:35

      They did not "put Saddam, Gaddafi and other dictators in place". Get your facts right man, before spouting nonsense. You're upside down. Do you want your ass blown up by Islamic Jihadists, who will also stone your girlfriend to death?

      nowicki1 - 2012-03-19 09:24

      Freddy ! Of course they didn't ! http://gettingtruth.wordpress.com/category/cia/ . Its like arguing with a stubborn two year old.

  • Andre - 2012-03-16 14:20

    So much for global inter-dependance. Banks rule the world.

      goyougoodthing - 2012-03-16 16:37

      Andre, never say anthing about the banks, it seems to hit a nerve on here. As you can see by your thumbs down, even truth and logic is hated.

      Fred - 2012-03-16 17:01

      Poor pseudo-victim Goodthing. Try saying something that makes sense.

      goyougoodthing - 2012-03-16 17:21

      shakes his head*

      bluzulu - 2012-03-16 19:50

      It's always been....Damn Mafia....Money rules the world....Great Capitalism at work.

  • Jaba - 2012-03-16 14:29

    I think the sanctions are working and the “government” of the Ayatollahs is taking stain with these sanctions – just this month India has stopped shipping rice to Iran. While Ukraine has stopped shipping wheat, because they both haven't been paid lately. I hope the dwarf and the insane mullahs days are numbered.

      jowza1 - 2012-03-16 14:44

      Why is it that the same powers that are imposing sanctions have nuclear capabilities

      Jaba - 2012-03-16 14:49

      First and foremost in support of these sanctions is Saudi, Kuwait, UAE, Oman and Qatar who all fear an Iran that is nuclear, as Iran tries and force itself as the “leader” of the Islamic world (something the Gulf States reject) Many of the nations taking part in the sanctions are not nuclear armed; furthermore many make up the Arab league.

      jowza1 - 2012-03-16 14:55

      all those arab countries that you have mentioned have american puppets as heads of government.ask the people of those countries what they think

      Fred - 2012-03-16 15:37

      That's just stupid Jowza. The whole puppet thing. Dumb.

      goyougoodthing - 2012-03-16 16:31

      Fred calling people stupid. ha ha ha. He doesn't even know our reserve bank is private and when it's pointed out to him that they say it on their website he runs away. Stupid is as stupid does, Fred.

      Michele - 2012-03-16 16:36

      Jaba you are quite correct, the nations most opposed to Iran obtaining Nuke capabillities are their neighbours, if Iran get them then you are going to have serious arms race devloping in the middle east. The sunni's and shiahs hate each other with a passion at the best of times so you really don't want either of them running around with Nukes.

      Fred - 2012-03-16 17:02

      Goodthing, it's more than stupid to hold on too something that is plain wrong and which has been explained to you multiple times.

      goyougoodthing - 2012-03-16 17:11

      Fred, you've never put one bare fact on a page. No one. You also state that the Rothschilds are not bankers anymore: http://www.rothschild.com/ and http://en.wikipedia.org/wiki/N_M_Rothschild_%26_Sons I'm not sure what your facts are that can refute this.

      Xboxs - 2012-03-16 17:27

      @Jowza1..see how some muppets are referring to you as stupid? ja ne that is the world we live in.The west are saints while iran is satan's backyard.

      Fred - 2012-03-16 17:32

      The central banks are arms of government, not of private banks. The latter's shareholdings in central banks is mandated by governments and purely symbolic to commit the banks to the governments' monetary policies. The shares pay virtually nothing in dividends, and are largely worthless. I said the Rothschilds are not the force you make them out to be.

      goyougoodthing - 2012-03-16 17:36

      Last one Fred, the B.I.S. A wholly private clearning house for all the private banks of the world, which you say are not private. At the bottom you can see the 58 member banks, the Central Banks of each country, SA included. This is not conspiracy, this is out in the open. http://en.wikipedia.org/wiki/Bank_for_International_Settlements

      goyougoodthing - 2012-03-16 17:42

      The dividends are not where the profit is Fred, don't be a silly boy. It's in the interest-bearing loans on all funds, for no reason. If the interest to the central banks, was given to governments, as you suggest, then all governments would have endless wealth. (They would also be charging citizens interest on fresh air). However the world reveals a different reality.

      Fred - 2012-03-16 18:16

      You've totally confused yourself and are ignorant to how the world banking and financial system works. A clearing house is not a central bank. It is a clearing house for private banks through which their daily transactions are cleared between them. Money is a commodity, the price of which is interest. This price is paid by consumers to private banks that supply this commodity to them. Central banks control the supply of money to private banks, and ultimately to consumers, as well as the price of money in the economy in general, through loans they make to private banks and the interest they charge on these loans. I don't suggest anywhere that interest paid by consumers to private banks is paid the central banks.

      goyougoodthing - 2012-03-16 18:26

      Fred, I know exactly how it works. You omit some points it seems. The clearing house is not a bank we know this, I never said it was. I said it provided a link to the private banks for which it operates. The central banks, the reserves if you will, are listed there, including our own South African Reserve bank. These are private AND central, not one or the other. The cost of putting ink on paper, by a private central bank, is interest, as you finally say. The question is of course, why does it make sense for governments to pay for the right to use their own money. It's all about profit and control. In a system where the finite money in an economy is controlled by private companies, the only outcome is debt. If I have the only 100 dollars in existence, and lend it to you, then charge you interest, where are you going to get 110 dollars to give back to me? That's right, another loan from me, with interest, to ay back the original loan. This is interest on something I just invented with ink and paper. The system is flawed and you know it.

      Fred - 2012-03-16 18:39

      You're not making sense. Your thought process and understanding as these relate to the banking system are jumbled, confused and ultimately wrong. Ofcourse the baking system is flawed. The world's not perfect. Truly, I recommend sitting in on economics lectures at a good business school.

      goyougoodthing - 2012-03-16 18:50

      Fred, The Fed is private, you now admit that. It gets it's money from treasury, at 'cost' price for paper and face value for coins. Then the Fed, the Central Bank (which is private) issues this to the private banks that then supply the public. It ( The Fed ) also keeps 'accounts' for these banks and also for government. On the surface a smashing idea, except, why take the central component of an economy and put it in private hands? There will be admin fees, of course there will be, that is how business works. But in this case it's just a way of creating debt, not wealth. In the USA there have been 3 different private versions of the FED, objections have shifted the power to government and back on different occassions. The Bank of England was also a 'parastatal' for a while up until 1997, although it started out private, as it is now. Don't pretend this isn't the case and also that I am mad. This power play has shifted many times in many countries and it's not as if everyone thinks it's a great system. I am out, have a good evening.

      Fred - 2012-03-16 21:36

      I do not. You're being manipulative and incredibly stubborn. But we're all free to believe what we want to believe. You're keeping yourself on the lunatic fringe of reality.

      goyougoodthing - 2012-03-17 11:56

      No, Fred. I continue to provide concrete proof and evidence of how the system works. You keep telling me I am wrong with no justification, and then add in a little, slightly twisted, version of truth. I then expose that and you squirm more. It's all there, log on to the reserve bank website itself, phone a friend, whatever you need to do to finally see the truth. I am not posting these things again on other pages, when you have something with substance, please, go ahead and refute anything I have said here. You either know the truth and for some reason do not want it to reach the masses, or you are blindly indoctrinated. Whichever it is, let me just say that the master you are serving is the wrong one.

      Fred - 2012-03-17 17:02

      The justification is all there. But hey, carry on. Just know no-one will take much notice of you because your understanding is completely wrong.

  • Olaf - 2012-03-16 14:39

    And why is the same not being applied to the warmongering Americans?

      Rob - 2012-03-16 14:51

      Because for the forseeable future the USA is policing the planet. You may not like that, you may think that another country will do a better job, or you may just want chaos. The reality is that pretty much everything that we have become dependent on requires a measure of world-wide stability. Take a long look at what is happening in SA, extend your view to Africa and beyond, do you have confidence that without a global policeman the global systems won't simply collapse?

      jowza1 - 2012-03-16 14:59

      criticallydishonest.the americans are bankrupt,they have a deficit running into trillions of dollars,that is the reason the world is in a economic mess.if they are honest police as you say,why are only countries with oil that are being policed

      Fred - 2012-03-16 15:39

      Olaf, do you want your ass to be blown up by real war-monguerers: Islamic jihadists who are bombing civilians in public places by the hundreds of thousands in their attempt to take the world backwards 2,500 years? Wake up buddy. You're being a fool.

      Rob - 2012-03-16 15:59

      Jowza1: Are you reading my comment or somebody elses? Where did I say that the americans are honest police? I didn't, you invented that foryourself! Anyway which americans are you referring to, maybe Cubans or Argentinians or Canadian Eskimos. If you are referring to the USA, well yes they are only just coming through economic problems, no doubt they were caused in part by the massive cost of world-wide military actions since World War 1. Definitely the cost of HIV support has not helped them, and a very large part of that was and is being spent in South Africa. But yes they want cheap oil, who wouldn't? Of course you are entitled to your opinions and your attitude, but you will get more milage if you balance your extremism with information.

      goyougoodthing - 2012-03-16 16:33

      If you people think for one minute this is about oil or nukes you are wrong. It's about the banks. It always is about the banks. Wake up.

      allcoveredinNinjas - 2012-03-16 16:34

      America bankrupt .... hahahahaha. Oil theory again, really ,apply basic demand and supply theory to it it falls like a deck of cards. If the third largest supplier of oil is out the market then what do you think the impact is on price , for everyone ? Its a far easier sell that those countries are operated by autocratic dictators who use their oil wealth to maintain their positions of power at the expense of the people.

      Fred - 2012-03-16 17:04

      The Jihadists and the Iranian regime are agents of the banks. That's it! And the Rothschilds (of all people) are there behind the scenes pulling the strings of everyone. Hahahaha!

  • victor.kaumba - 2012-03-16 15:07

    Lets face it...what has Iran really done to Germany and France, except shaking the comforts of Britain and the US, to deserve such a multilateral front of financial sanctions against it? I would appreciate a comment/s from some1 well informed and abreast with this "Iran" story.

      Fred - 2012-03-16 15:43

      The Iranian regime, distinct from the Iranian people, have threatened to destroy Israel numerous times, deny the occurrence of the single biggest attempt at human genocide in the history of humankind that saw the extermination of six million people, and adjusts elections to hold onto power. It is the biggest funder of international terrorism by far, and is an ultra-chauvinistic, still supporting the stoning to death of women for human events like adultery. In a nutshell, these are the reasons the freer world absolutely will not allow it to acquire nuclear weapons.

      BA - 2012-03-16 15:43

      It is a good question Victor. Every country acts in what it considers to be its best interests. There is no doubt that iran has imperialistic aims for dominating the Middle East region. iran also has made no pretence about its animosity to the West, as well as sunni muslim countries like Saudi Arabia (hence Saudi Arabia's position against iran). The West therefore fears a dominant, threatening and aggressive iran, and wishes to avoid a situation where iran has nuclear weapons which it would use to threaten, destabilize and dominate the Middle East, all of which of course has implications for oil supply and therefore the fragile economies of the West. Moreover, however one may wish to try and spin things, iran represents a real existential threat to Irael, which it has threatened to destroy on several occassions (some people debate the translation from arabic, but it is extremely clear that iran wishes Israel to be destroyed. A nuclear armed iran is therefore of grave concern for the lives of all those living in Israel, especially as iran's proxies in the Middle East, hizbollah and hamas, could be supplied with a so called "dirty bomb" or low grade nuclear weapon, which would result in a terrible holocaust in Israel without the risk of retaliation against iran itself. The West is therefore pushing back hard against the nuclear arming of an aggressive, imperialistic enemy.

      allcoveredinNinjas - 2012-03-16 16:22

      They are building a atomic weapons in contravention of the NPT ,obtained weapons designs illegally from pakistani scientist AQ Khan who confessed to running the sydicate and suppling plans to N Korea and Iran . The ramifications of a nuclear Iran doesn't not bode well for middle -east and global security and stability . This would increase ambitions of other ME nations to produce atomic weapons , it would undoubtedly flare up Sunni /Shias tensions . With global tensions at a all time high you'll see unparalled levels of price increases of food and energy , commodities supply stiffling which would only increase the likelyhood of armed conflict, civil unrest . The poor will be worst effected and no help will be available . Rather than a detterent it will be a tinderbox for global conflict , the reasons should be self evident that Iran should not be allowed to persue weapons and the reason that US , Briton and France still have arms although dramatically reduced stockpiles is due to umbrella protection agreements with other countries as a trade off for their own nuclear weapons ambitions for defence (eg: Japan), in other words they are custodian to multi-nation nuclear arms.

      goyougoodthing - 2012-03-16 17:00

      Victor, using the pretense of war against Israel, the threat of going to war from Israel, and the supposed nuclear weapons programme as a cover, the private banks have got their international money trading unit, SWIFT, to cut off Iran's banks. The real plan is to install a private Central Bank in Iran and to charge the people interest on money that the private central bank simply prints. Iran is one of 3 countries in the world that does not have a central private bank. Others than did not before, now do, such as: Egypt, Afghanistan and so on... it's not about war and it's not about oil, it's about banking. I will get 1000 thumbs down from the stupid, but that is the real story. If you want to know how the USA and it's rulers really control things, look up Edward Bernays, Freud's nephew, master of PR, propaganda and overthrowing governments on behalf of the USA. You can also see who he is connected to by blood, it might open your eyes.

      Fred - 2012-03-16 17:36

      You really have tied yourself into a dark web, Goodthing. I recommend attending some economics lectures at a top business school. Maybe then you'll understand what economics is, how it works, and how the financial system works.

  • Fidel - 2012-03-17 01:01

    This should be a wake up call to other non western countries to develop an alternative trading system outside the Bank of International Settlements (BIS) as these system were created by those who wish to control and choke the entire world while they were at the height of colonialism.

      Fred - 2012-03-17 17:07

      The world is integrating, not moving towards division as you suggest and want in your vengeful, small way. Whatever changes are decided for the world financial system will be decided by the world community together.

  • nowicki1 - 2012-03-19 09:19

    You're all missing the point. It doesn't matter if Iran is trying to develop nuclear weapons or not. Iran has routinely and systematically undermined the sovereignty of the United States in ways that can only be construed as aggressive and even war inciting. Iran has attacked and overthrown the leaders of several countries in our region, and they currently maintain a large military force near US borders. Iran enforced sanctions specifically designed to undermine the US economy. Iran invaded US airspace with unmanned aerial drones. They specifically designed a computer virus to disrupt US research and implanted it in US government computers. They even went so far as to assassinate American citizens on US soil just because those citizens were nuclear scientists. If those aren't the actions of an aggressive state trying to incite war, I don't know what is. Remember, Iranian intelligence agencies already successfully conspired to overthrow our democratically elected government back in the 1950s. We can't let it happen again! Oh wait . . .

  • pages:
  • 1