Lawmakers are considering a bill that would push Trump officials to ensure Iran is cut off from a key financial service amid concerns that the administration is shying away from its maximum pressure campaign against Tehran.
Senators’ concerns revolve around SWIFT, a Belgium-based institution that facilitates money transfers across borders. Republicans want the administration to penalize SWIFT, potentially by sanctioning members of its board, if the cooperative does not disconnect designated Iranian banks by a November sanctions deadline. But doubts have emerged about whether the administration will pressure SWIFT to expel Iran, or whether Trump officials will allow Iranian banks to remain connected to the service.
A draft bill led by Texas senator Ted Cruz, and first reported on by the Associated Press, would require the president to penalize SWIFT if it does not cut off designated banks. The legislation also expands the range of banks that SWIFT must expel to include all of those that were released from sanctions after the 2015 nuclear deal.
“To end the Iranian terrorist regime’s ambitions for nuclear weapons once and for all,” Florida senator Marco Rubio told THE WEEKLY STANDARD, “the Trump administration must not only restore all sanctions suspended by President Obama’s flawed nuclear deal, but also impose additional, farther-reaching sanctions that truly maximize pressure against Iran’s government.”
Lawmakers have for months been pressuring the administration to expel Iran from SWIFT. “The administration’s maximum pressure campaign will not succeed if the Islamic Republic remains connected to SWIFT,” reads an August letter to the Treasury Department signed by Cruz and 15 Republican senators. “All banks represented on the board of SWIFT must be held accountable if they circumvent American sanctions and empower the Iranian regime.”
Congress has served as the engine for cutting Iran off from SWIFT before. In 2012, a bill authorizing the president to sanction members of SWIFT’s board prompted the cooperative to disconnect certain Iranian banks. That disconnect is widely seen as critical to isolating Iran and bringing the country to the table years later for nuclear negotiations.
The legislation currently being considered by lawmakers also authorizes the president to sanction any Iranian bank that engages in terror financing. This would allow for the total reimposition of all U.S. sanctions that were lifted on these banks after the 2015 nuclear deal.
Proponents of penalizing SWIFT’s board of directors if need be say that Iran’s expulsion from the service is a necessary part of the administration’s maximum pressure campaign, as it is “one of the most serious financial sanctions possible.” Those skeptical of the move point in part to the potential of creating a further riff with Europe, which has vowed to stick with the 2015 nuclear deal.
Katherine Bauer, a fellow at the Washington Institute for Near East Policy and former Treasury official, said that disconnecting Iranian banks isn’t a “silver bullet” solution for reducing Iran’s access to the global financial system and suggested that it may not have the same intense effect as it did in 2012.
“Even the banks that did reengage ultimately with Iran during the period of relief, a lot of them, big banks and small banks, have since withdrawn from those relationships,” she said. “Iranian banks are already very isolated, so the kind of dramatic impact that this had previously—I don’t think we would expect to see now.”
The administration is in the process of re-imposing sanctions that were lifted under the 2015 nuclear deal, with a deadline related to oil and financial sanctions coming in early November.
