A group of US lawmakers have urged the US Treasury Department to cut off Iran from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Speaking to Radio Sputnik, Christopher Bovis, professor of international business law at the University of Hull in England, has commented on the potential consequences of the proposal. The full text of the interview follows:
SPUTNIK: What is your take on the proposition put forward by the US senators on this one?
CHRISTOPHER BOVIS: They maximized pressure. They maximized diplomatic pressure. They maximized legislative pressure on the United States administration to exercise the aftermath of President [Donald] Trump’s decision to revoke the deal that the previous administration signed vis-à-vis Iran’s international obligations. And they also created this artificial economic war vis-à-vis the European Union in order to achieve their diplomatic results.
Do you think it’s likely that it will be implemented because it is rather archaic?
Most likely it will be implemented. The administration and President Trump insisted that they would see the withdrawal from the pact to the end and therefore they used every possible financial, diplomacy route, including this one, which is based on the utilities of the financial transactions of banks in order to achieve their objectives.
How can this development further strain relations between Iran and the US? It’s only going to deteriorate things even worse, isn’t it?
Absolutely, it will deteriorate things for the worse. Or it could also deteriorate the relationship between the countries of the European Union and the United States administration. It’s a full-blown economic war that will take on not only the sanctions, diplomatic or economic sanctions but it will move into financial hostilities between the two continents.
According to reports, Germany has been developing an alternative to the SWIFT payment system. Is it likely that this could be used by Iran to avoid US restrictions? Is there a way around restrictions using this potential new system?
Of course, that is widely reported and this is what is happening at the moment. The European Commission has been developing a system, a parallel system to SWIFT, which will allow Iran to interface with European financial systems, European clearing systems, using the nominations supported and created by the European Investment Bank based on the euro.
In addition to that, there is a big opportunity to use that double, that parallel financial system in order to create a competitive advantage for Europe, for the European Union vis-à-vis other parts of the world for enhancing clearance and enhancing financial transactions alongside with the previous deals we have happening via SWIFT.
Despite anti-Iran sanctions, many European companies have been seeking alternative routes to doing business with Iran. What consequences can this have on the bloc’s ties with Washington? You’ve alluded to this already but it just seems that there are many companies throughout the European Union and the world that want to continue trading with Iran. What consequences will this actually lead to?
It will be a full-blown economic and financial war between the two continents and it will come to a point that some actions, some activities that are already happening need to be renegotiated through other international treaties or through the World Trade Organization or through the United Nations.
At the moment, we are heading for a collision course between the two continents, between the two economic systems. And the utilization of the financial regulatory environment, including SWIFT, including payment and clearing system it’s used in order to promote the economic and diplomacy goals of the United States. And Europe, the European Union is responding quite successfully, quite adequately on every threat that has been posed by the United States.