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Iran Banks Said to Be Skirting Cash Ban

DUBAI—Iranian banks have managed to bypass a ban imposed last year that was intended to cut its access to global financial transactions through the world's most-used electronic payment system, known as Swift, according to executives that run the system.

Swift officials told The Wall Street Journal that Iranian banks have fallen back on simpler methods for executing transactions with their international counterparts, sending instructions by telephone or email.

"It's very clear that the Iranians have other means [of] moving their money around and commissioning transactions," said Alain Raes, chief executive for EMEA and Asia Pacific at Belgium-based Swift, or the Society for Worldwide Interbank Financial Telecommunication.

Such alternatives are "not as secure as Swift and [lack] the convenience factor," added Gottfried Leibbrandt, the company's chief executive. "But yes, there are lots of alternatives to Swift."

The executives spoke on the sidelines of a news conference in Dubai by Swift.

The ban came about after U.S. lawmakers said that Iranian companies and banks blacklisted by the U.S. and EU had been using Swift to evade international sanctions.

In March, Swift disconnected about 30 Iranian banks, including the central bank, after the European Union ban on dealings with the lenders.

Iran has faced progressively tougher sanctions from the U.S. and the EU, in an effort to pressure the country to curb its nuclear program. Iran says its nuclear program is for civilian purposes only.


On Wednesday, the U.S. Treasury Department expanded sanctions against Iran, tightening the country's access to its oil revenue and targeting officials and companies allegedly involved in human-rights abuses.

The latest U.S. provisions restrict the ability of Iran to use oil revenue held in foreign financial institutions, as well as prevent repatriation of those funds, the Treasury Department said.

The increased restrictions don't apply to the sale of agricultural commodities, food, medicine or medical devices to Iran.

The U.S. also sanctioned the Islamic Republic of Iran Broadcasting and its director for censoring information and using state-media transmissions to trample dissent, filter out unwanted television content and broadcast its own propaganda, according to the Treasury statement.

"Our policy is clear: So long as Iran continues to fail to address the concerns of the international community about its nuclear program, the U.S. will impose tighter sanctions and intensify the economic pressure against the Iranian regime," said Treasury's undersecretary for terrorism and financial intelligence, David Cohen.

The Iranian Cyber Police and Communications Regulatory Authority also were named for their roles in monitoring Internet content and other online activities.

Treasury also targeted Iran Electronics Industries for producing electronic systems that the government uses in its monitoring.

Swift, which is supervised by the central banks of the Group of 10 leading industrial nations, as well as Belgium's central bank, facilitates the flow of most electronic financial transactions.

Almost all major banks and finance firms use it to send financial data and messages, making it akin to a globally accepted postal service for financial transactions.

Mr. Leibbrandt said there are continued talks between his company and European regulators about whether it is appropriate for Swift to be required to impose sanctions on countries such as Iran. "There is a dialogue going on around the trade-off between using us as a sanctions tool for other countries and impeding our role as really serving as a global infrastructure mechanism," he said. "We've seen reversals in Myanmar where banks were able to trade again. There is always a chance for a reversal if the reasons for the imposition of sanctions on affected banks are resolved."

Iran has been badly affected by the slump in oil exports and the refusal of many international banks to make deals as a result of the international sanctions. That result has triggered a sharp drop in the Iranian currency, and forced Iran to cut back on imports. In August, Iran banned imports of 2,000 luxury items, including mobile phones, laptops and cars, in an effort to conserve foreign currency.

Mr. Leibbrandt played down the impact of the Iran sanctions on his company. He said that before the sanctions were imposed, the volume of Iranian transactions via Swift amounted to less than 1% of the total. Swift reported about €600 million ($815 million) in revenues last year.

"Most of the targeted [Iranian banks] weren't very active internationally. In terms of [the ban] impact on the business, Iran isn't a big part of our business," he said.

Write to Leila Hatoum at and Nicolas Parasie at

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George Doerth

Obama continues the simple-minded view that "pressure" will make Iran call uncle. There is a zero chance for the success of this stupid policy.

Actually, three Iranian banks recently got the EU courts to overturn restrictions on their activities in Europe. So, even legal authorities in Europe recognize the illegal nature of many of the sanctions on Iran. Of course, the court system in the U.S. is a joke. There is no point in even trying to argue with the ridiculous American judicial system.

David Dahl

The sanctions on Iran have reached the point of diminishing returns. The "west" has run out of leverage with Iran and Iran has not yielded. Clearly, Iran is in a better position now than it was 6-7 years ago when this failed policy was imposed on the U.S. by AIPAC.

Jim Phippard


The rapidly decreasing value of the Iranian currency, coupled with equally declining imports, would suggest that the recent sanctions are having a major effect. Whether the Iranian government will respond is another question; they don't seem to mind seeing their population suffer as a result of the sanctions.

George Doerth

Imports have been reduced because domestic production has increased to make up for many of the goods that were imported before. For example, Iran used to import about 40% of its gasoline. Now, Iran is beginning to export gasoline.

It is universally acknowledged by all who have done polling in Iran that the people blame the U.S. and the West for their difficulties, not the Iranian government.

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