U.S., Europe eye risky penalty against Iran: Suspension from SWIFT

The Obama administration wants Iran evicted from SWIFT, an independent financial clearinghouse that is crucial to the country’s overseas oil sales. That would leapfrog the current slow-pressure campaign of sanctions aimed at persuading Iran to drop what the U.S. and its allies contend is a drive toward developing and building nuclear weapons. It also perhaps would buy time for the U.S. to persuade Israel not to launch a pre-emptive military strike on Iran this spring.

The last-resort financial effort suggests the U.S. and Europe are grasping for ways to show immediate results because economic sanctions have so far failed to force Iran back to nuclear talks.

But such a penalty could send oil prices soaring when many of the world’s economies are still frail. It also could hurt ordinary Iranians and undercut the reputation of SWIFT, a banking hub used by virtually every nation and corporation around the world. The organization’s full name is the Society for Worldwide Interbank Financial Telecommunications…

More than 40 Iranian banks and institutions use SWIFT to process financial transactions, and losing access to that flow of international funds could badly damage the Islamic republic’s economy. It would also probably hurt average Iranians more than the welter of existing banking sanctions already in place since prices for household goods would rise while the value of Iranian currency would drop.