Iran cut off from global financial system

BRUSSELS (AP) — Iran was effectively cut off from global commerce on Thursday, when the company that handles financial transactions said it was severing ties with many Iranian banks — part of an international effort to discourage Tehran from developing nuclear weapons.

The action enforces European Union sanctions because global financial transactions are impossible without using SWIFT, and it will go a long way toward isolating Iran financially.

The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a banking hub crucial to oil, financial transactions and other trades.

"Disconnecting banks is an extraordinary and unprecedented step for SWIFT," said Lazaro Campos, chief executive of SWIFT. "It is a direct result of international and multilateral action to intensify financial sanctions against Iran."

In a statement, the company said the EU decision to impose sanctions "prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks" and "forces SWIFT to take action."

More...