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November 28, 2014 / 6 Kislev, 5775
At a Glance

Posts Tagged ‘embargo’

Thumbing its Nose at SWIFT Ban, Iran Relies on Alternative Methods to Continue its International Banking

Friday, March 16th, 2012

On Sunday, May 27, 2012, Iran announced that they have successfully bypassed the SWIFT ban, and have an alternative financial network setup.

On March 16, 2012, JewishPress.com described the system that Iran had set up in anticipation of the SWIFT ban in the article below.

 

Five years ago, the SWIFT clearing system ban on Iranian banks, which goes into effect Saturday, would have yielded satisfactory results. But nowadays Iran is relying on rogue financial systems created by South-American countries, and on its trade with India, China, Russia, Brazil and Turkey, to maintain the flow of money, goods and services for which it continues to pay with oil.

The Belgium-based Society for Worldwide Interbank Financial Telecommunication, or SWIFT, a clearing system used by the world’s major banks, announced Thursday that as of Saturday it will obey the European Union’s ban on blacklisted Iranian financial firms, including some 40 Iranian banks.

The SWIFT ban is an inconvenience

But an article by Otto Reich and Ezequiel Vazquez Ger in the Miami Herald suggests the SWIFT ban will present nothing more than an inconvenience for Iran, because the latter has prepared for just this occasion, utilizing President Mahmoud Ahmadinejad to set up reliable alternative connections for money transfers by Iranian financial institutions.

Essentially, Iran will continue to trade internationally, with the support of ALBA (Alianza Bolivariana para los Pueblos de Nuestra América – Bolivarian Alternative of the Americas) countries: Cuba, Venezuela, Bolivia, Ecuador and Nicaragua.

The ALBA countries have created SUCRE (Sistema Único de Compensación Regional – Unique System of Regional Compensation), which is a virtual currency unit which makes it possible for ALBA members to bypass foreign banks’ supervision.

Ahmadinejad has been preparing for this scenario for years

This system has been used effectively by the belligerent Iran, practically since its inception. Iranian president Mahmoud Ahmadinejad has been a frequent traveler to Venezuela, Nicaragua, Cuba, and Ecuador, making more than half a dozen trips to the region since his election in 2005.

Reich and Vazquez Ger cite confidential bank reports dating back to November 2008, which suggest that the Central Bank of Ecuador authorized the establishment of “a mechanism for deposits and payments to facilitate foreign trade” with Iran. The two authors say that the Central Bank of Ecuador approved in closed sessions a system that would allow the confirmation and payment of letters of credit for foreign trade transactions between it, the Export Development Bank of Iran (EDBI) and the International Development Bank in Caracas, Venezuela (BID).

Both the EBDI and the BID are on the U.S. Treasury’s blacklist of companies doing business with Iran’s military, but the Central Bank of Ecuador chose to ignore this fact when jumping into bed with Iran and Venezuela. Immediately after signing the agreement, the Iranian bank opened up for BID a lavish credit line of $40 million for “importation of Iranian goods and services to Ecuador.”

Reich and Vazquez Ger point out that the fact that Ecuador uses the US dollar as its currency means that once Iranian money gets into the country it is automatically injected into the economy.

But some believe that in the end the ban may work

But a high-placed Israeli financial officer told the Jewish Press Friday that any country that chooses to cooperate with Iran would be blocked sooner or later, as the need for trade with the West inevitably arises. This means that the rate of flow of Iranian money out of Iran will remain limited, despite Iran’s publicized South American rogue connection. “Any country that wants to avoid a direct confrontation with the US would opt out of a cooperation deal with Iran, including even Venezuela. Should the US at some point threaten Venezuela, it, too, would drop Iran like a hot potato.”

India-Iran avoid the dollar for rupees

Another venue for uninterrupted Iranian trade has been cultivated over the past few years with the government of India. Earlier in March the semi-official Mehr news agency reported that Tehran and New Delhi have announced that they are planning to hit $25 billion in annual bilateral trade over the next four years, with payments for Iranian oil made in rupees.

J.E. Dyer, a retired US Naval Intelligence officer who served around the world, afloat and ashore, from 1983 to 2004, told the Jewish Press in an email:

“I have been watching this for a while. India and Iran have arranged to increase trade, including Iranian oil, outside of SWIFT. They are dealing in rupees, but the point for Iran is that she can buy things she needs with her rupees. Long-term value isn’t the issue right now. China and Russia dropped the US dollar as their trading currency a while back, and China in particular has been essentially importing Iranian oil on a barter basis, for goods. No need for SWIFT.

“The Latin American countries have been helping Iran evade US/EU sanctions for a while, and so has Turkey.

The SWIFT ban may backfire by causing economic realignments

“I predicted weeks ago that excluding Iran from SWIFT wouldn’t bring Iran to her knees. Instead, it will give a world in flux new reasons to coalesce differently for power and influence. I don’t think North America and the EU have the economic power now to make Iran holler Uncle! What we can do is force a realignment that has a strong probability of rebounding to our disadvantage.

Iran UPDATE: A-Jad says Iran Unaffected By EU Embargo, Wants to Talk

Thursday, January 26th, 2012

Iranian President Mahmoud Ahmadinejad, responding to calls from Western officials to return to negotiations over its disputed nuclear program, claimed that Iran is ready and willing for frank discussion about its nuclear program.

“They have this excuse that Iran is dodging negotiations while it is not the case,” Ahmadenijad said, referring to the Western diplomats. “Why should we run away from the negotiations?”

Iran’s top officials are alternating between alleged compliance with and open defiance of the West, with Ahmadinejad saying Wednesday that the EU oil embargo would not harm the Islamic Republic.

“Once our trade with the Europe was around 90 percent but now it has reached 10 percent and we are not seeking this 10 percent… experience has shown that Iranian nation will not be hurt,” Ahmadinejad insisted.

UPDATE: EU Approves Oil Embargo on Iran

Monday, January 23rd, 2012

The European Union’s 27 foreign ministers have approved an embargo on Iranian oil exports.

Under the plan, EU states will impose an immediate ban on new contracts with Iran for oil and petro-chemical products, and existing contracts must terminate by July 1.

Iran exports 20% of its oil to EU states.

EU Reportedly Agrees to Iran Oil Embargo

Monday, January 23rd, 2012

In a move certain to intensify pressure on Iran to halt its nuclear program, European Union ambassadors have agreed on a plan to institute an embargo on Iranian oil exports. “The principal agreement on the ban for the Iranian oil imports was reached,” a senior EU diplomat in Brussels was quoted as saying. The decision must now get formal approval from the EU’s foreign ministers.

According to sources, the embargo would be implemented gradually, with all imports to terminate completely by July 1, 2012.

EU Gets Tough On Iran With Planned Oil Embargo

Thursday, January 19th, 2012

International pressure on Iran took a major step forward, as European foreign ministers declared their countries’ intent to embargo oil from the Islamic Republic, beginning as early as July, and freeze the assets of Iran’s central bank.

Iran, in anticipation of a possible oil embargo, was already embroiled in a war of words with the United States over Teheran’s threats to close the Straits of Hormuz, effectively strangling maritime commercial traffic in the Persian Gulf, when European Union leaders meeting in Brussels moved to toughen economic sanctions on the regime of President Mahmoud Ahmadinejad.

American Secretary of Defense Leon Panetta responded to Iranian defense officials’ threats to attack American aircraft carriers in the Persian Gulf by telling reporters that the United States was “fully prepared to deal with any Iranian threat” in the Gulf.

Israeli Prime Minister Binyamin Netanyahu, on an official visit to the Netherlands while the EU foreign ministers were meeting in nearby Belgium, praised Dutch support for the sanctions.

The United Nations also announced that a special mission of the International Atomic Energy Agency would travel to Iran at the end of this month to investigate international suspicions of a “military angle” to Iran’s feverish drive for nuclear power. Iran has repeatedly denied intentions of building nuclear weapons, but it has also subverted international efforts to verify the civilian scope of Iran’s plans.

Iran Warns EU That Oil Embargo Would Be “economic suicide”

Tuesday, January 17th, 2012

Iran’s OPEC governor, Mohammad Ali Khatibi, scoffed at a proposed European Union embargo on Iranian oil as “economic suicide” for Europe.

European states are considering whether to join the US in its bid to further isolate Iran by outlawing transactions with Iran’s central bank, which would make it harder for customers to pay for Iranian oil and thereby reduce Iranian oil shipments.

“Regarding the economic crisis in the eurozone, imposing any sanction on Iran’s oil will push European countries into a deeper crisis,” Khatibi said.

Iran sells approximately 20% of its oil exports to Europe.

 

Iran Warns Gulf Arabs on Boosting Oil Production

Sunday, January 15th, 2012

Iran warned Gulf Arab nations on Sunday against boosting output to counteract a potential decrease in Iran’s exports resulting from the current embargo regime.

Iran’s OPEC governor said that attempts by Gulf states to replace Iran’s share of the market output would make them an “accomplice in further events.”

“These acts will not be considered friendly,” he added.

Printed from: http://www.jewishpress.com/news/breaking-news/iran-warns-gulf-arabs-on-boosting-oil-production/2012/01/15/

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