US Decision to Keep Iran in Swift Seen as a Compromise

Sanctions on Iran’s banks, oil exports, ships and ports, lifted in 2015 as part of a nuclear weapons agreement that Trump abandoned in May, will be reimposed on Monday. But it is not clear whether those banks would be allowed to participate in the Society for Worldwide Interbank Financial Telecommunication, or Swift. That is the system that allows the world’s banks to communicate with one another, making global transactions possible.
US Treasury Secretary Steve Mnuchin ended the suspense. “We have advised Swift that it must disconnect any Iranian financial institution that we designate as soon as technologically feasible to avoid sanctions exposure,” he told reporters on a conference call.
Swift is a big deal. Isolating Iran from it compounds its financial crisis. Even if companies were willing to risk being cut off from the US economy to purchase Iranian oil, it will be almost impossible for Iran to receive the payments if its banks aren’t part of Swift. 
So it’s not surprising that Swift was at the center of a policy fight within the Trump administration and congress. On one side were the treasury department and the state department. They worried that a full Swift cutoff would strain relations with allies in Europe who have been trying to keep Iran inside the nuclear deal along with Russia and China, Bloomberg reported. 
On the other side was the hawkish National Security Adviser John Bolton and neo-cons in Congress who feared that Iranian access to Swift would be a lifeline to evade sanctions and wait until a friendlier US administration took power. 
European Union foreign policy chief Federica Mogherini has discussed plans for creating a policy vehicle that would shield European concerns from US sanctions. Such a mechanism would rely on Iranian access to Swift. 
The US administration and congressional sources say that the decision to announce the Swift decision was made on Thursday evening. Most Iran policy-watchers then were expecting the Trump administration to punt. Politico reported on Thursday evening that Senator Ted Cruz of Texas was preparing legislation to force the Swift cutoff.
Mnuchin himself was trying to thread a needle by not making it appear that the US was dictating which banks Swift needed to blacklist, according to sources. That said, Mnuchin also told reporters that the US could impose sanctions on Swift itself.
In the end, the Swift decision represented a compromise. Mnuchin said that some Iranian financial institutions that were not sanctioned could remain on Swift, but only to conduct transactions involving food and medicine.