What is SWIFT system?

THE HANS INDIA |   Jul 15,2018 , 03:54 AM IST

What is SWIFT system?
The United States is pressuring the European Union and a global electronic banking system to expel Iranian banks from a network used to transfer money, another step in Western efforts to deprive Tehran of funds needed to develop nuclear weapons. 

Kicking Iranian banks out of the Belgium-based SWIFT, or Society for Worldwide Interbank Financial Telecommunication, would cut off one of the only remaining avenues for Iran to transact business with the rest of the world, according to Reuters. SWIFT facilitates the bulk of the world’s cross-border payments, exchanging 18 million payment messages per day between banks and other financial institutions in 210 countries.  Challenge for Iran is to retain access to the SWIFT international bank payments messaging system.


A SWIFT code is an international bank code that identifies particular banks worldwide. It's also known as a Bank Identifier Code (BIC). CommBank uses SWIFT codes to send money to overseas banks. A SWIFT code consists of 8 or 11 characters. ... You'll need to give this code to anyone sending money to you from overseas, according to Commbank.com. 

SWIFT Code is an acronym for Society for Worldwide Interbank Financial Telecommunication Code. IFSC code is short for Indian Financial System Code. SWIFT code is a globally recognised code, used at the time of international credit transfer between banks and also when there is an exchange of messages between banks. 

http://thehill.com writes that in 2012, due to Europe’s concern about Iran’s nuclear program and under the threat of U.S. sanctions, the European Union required SWIFT to cut major Iranian banks off from its network, a measure that severely impacted Iran’s access to the global financial system. 

SWIFT resumed offering services to Iranian banks in 2016 after the nuclear deal came into force. Faced with renewed U.S. sanctions, SWIFT management will probably again cut Iran off from its network. But if Europe decides to fight with Washington, European governments could enact laws to legally require that SWIFT provide services to Iranian banks as long as the banks complied with European law. 

While the Trump administration would doubtless vociferously oppose this, the Treasury Department would find it virtually impossible to actually sanction SWIFT for providing services that SWIFT was legally required to offer under controlling European law.



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