Canceling the Mullahs' Credit Card

How to sever Iran's financial lifeline.

BY MARK DUBOWITZ, JONATHAN SCHANZER | FEBRUARY 1, 2012

The European Central Bank's own guidelines are particularly specific about the grounds for denying access to Target2, the system that settles transactions in euros through the SWIFT gateway. These guidelines bar access to those engaged in "money laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems." This language describes the Iranian regime to the letter.

The Obama administration has sought to persuade key legislators that it is better positioned to pursue this matter quietly. After all, it was former Treasury Undersecretary Stuart Levey who adopted this successful approach in persuading scores of financial institutions to terminate their ties to IRGC banks. And there may be some lingering sensitivities between SWIFT and the U.S. government that could complicate Washington's reported reliance on SWIFT for important information.

But if the past few years have taught us anything, it is that sanctions against Iran often don't move forward without congressional pressure and that legislation is useful leverage in persuading international companies, not to mention their governments, to pass and enforce their own sanctions. The Obama administration, for example, initially resisted sanctions against the Iranian Central Bank and various oil-market sanctions, but after legislators passed them into law, the administration embraced them with enthusiasm. The Central Bank sanctions, co-authored by Menendez and Kirk in December 2011, have had an immediate impact. In January, Europe imposed a voluntary embargo on Iranian oil -- another factor that likely led to the Iranian rial dropping by 50 percent, forcing the regime to make painful budget choices.

There are reasonable concerns about SWIFT sanctions. With any luck, the looming congressional debate will address them and result in well-crafted legislation. Like its precedents, whatever new law emerges should be flexible in both design and application by providing the administration with the ability to issue waivers and exceptions.

An even better outcome would be for SWIFT's board of directors to take action themselves. The smartest sanctions, after all, are those that encourage people to change course on their own.

ATTA KENARE/AFP/Getty Images

 SUBJECTS: IRAN, FINANCE, SOUTHEAST ASIA
 

Mark Dubowitz is executive director of the Foundation for Defense of Democracies (FDD) and head of its Iran Energy Project. Jonathan Schanzer, a former terrorism analyst for the U.S. Treasury Department, is FDD's vice president for research.

CHARLESFRITH

12:34 AM ET

February 2, 2012

When Do We Get To Cut Israel's Lifeline?

The media bias for example?

 

LEONIDASLEONIDAS

5:19 AM ET

February 2, 2012

When to we get some rest from ignorant haters?

If you have nothing to say about the article, shut up.

And get some education. Maybe then you'd know something about Israel's economy.

 

RYAN M WILLIAMS

1:02 AM ET

February 3, 2012

Speaking of Economies

And speaking of the article, I can't see how ruining a country's economy can be considered non violent? If China made an open move to undermine our economy we would take it as an act of war. Even if it was a close ally like Germany or France it would most likely lead to violence. Consider a recession worse than what we have been facing and politicians have someone to blame? How could they not act? Well unless they are banks of course.

 

ORMONDOTVOS

3:47 PM ET

February 3, 2012

Fairness, and acts of war...

It is so obvious that this is just another aspect of "The West versus Those Crazy Muslims"

Obviously, Judaeo-Christians are responsible about nuclear weapons, and Muslims aren't.

Unless they have nuclear weapons, and then it's all good.

 

LEONIDASLEONIDAS

5:27 AM ET

February 2, 2012

A very interesting article

We should've done this several years ago.

 

LOZER123

10:47 PM ET

March 1, 2012

I agree, but

There is no obvious plan for nuclear bomb nor Iranians would dare to cause a war in the region. The country is already isolated, their only insurance, the oil, would be all gone if they start a war. No other country would be on their side, not even their long term insurance, Russia & China. Having said that, we do not have money to fight another war either. Rather than trying to fix the economy, I cannot believe that the politicians are competing to see who can scare people into voting them to bomb Iran. This is the insurance we need for us? This is the insurance we need for our families? no.

 

S KUMAR

7:43 AM ET

February 2, 2012

Exaggerated

" the most dangerous state sponsor of worldwide terrorism" .... Really ??!!
Whatever happened to Pakistan ?
At least Iran is a democracy, however imperfect it might be.

 

ILOVEKNOWLEDGE

2:21 PM ET

February 2, 2012

lol Iran is a democracy?

A democracy for terrorists in which they have to rig already predetermined and feadulent elections? A democracy where the "Supreme Animal" rules through god? lol..

Even the positions within the government which mean not much (since Khamanei has all the power) is not open to regular citizens in society. You must be deemed "Islamic enough" by the Guardian Council. What a joke you are! SHAME ON YOU.

 

S KUMAR

12:20 AM ET

February 3, 2012

Typical American arrogance and presumption of know-it-all

Your very words show the height of your arrogance.
How many years has it been since Iran got its independence from being a western puppet ?
Just 32/33 years. Yes, the Iranian democracy is imperfect, but instead of shoving your American/Western notions down their throat, Iranians should be allowed to evolve a version which suits them the best. Calling names like "Supreme Animal" just shows your depravity.
And, for that matter, anyone could criticize the western politicians for being just puppets of corporates who gobble up the money of ordinary citizens by seemingly innocuous but actually fraudulent means. Look at the massive inequality in your country first and then criticize the system of others. I wonder what US democracy was like in 1810.

 

ILOVEKNOWLEDGE

1:37 AM ET

February 3, 2012

I am Iranian

Ignoramus, I am Iranian. Didn't you notice that with the facts I mentioned in which I stated that I was in Iran for over 8-months last year?

 

ORMONDOTVOS

3:49 PM ET

February 3, 2012

Islamic enough?

An atheist can't get elected in the USA. The current Mormon candidate won't get elected. Nut Christians of the Tea Party wield the power.

Religion poisons everything.

 

NASSER716

8:28 AM ET

February 2, 2012

Jewish conspiracy

Not surprising the authors are just more Israeli-firsters hell bent on using US instituions to do their dirty bidding.

 

TIMING

10:00 AM ET

February 2, 2012

james woolsey, former CIA director under clinton

http://www.jpost.com/IranianThreat/News/Article.aspx?id=256116

 

TIMING

12:19 PM ET

February 2, 2012

iranian missiles built to hit the US

I think they know better than you and your friends smokeboy...your friends johnboy and neoleft are all sickening people...truly sickening.

http://www.debka.com/article/21700/

 

LEIGH LEE

1:43 PM ET

February 2, 2012

Iran

Please give me the facts or any back-up data for the following comment.To me it is a much better description of Israel.

"money laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems." This language describes the Iranian regime to the letter.

 

SPOOD

3:26 PM ET

February 2, 2012

If you think it applies to Israel, you don't care about facts

Lets see when was the last time Israel conducted public tests of its ballistic missiles, never.

Iran sponsors proxy forces in how many countries? Lets see we have them in Iraq, Afghanistan, Gaza, Lebanon and every Shia based insurgency in the Middle East.

Its no use actually having a discussion with people who are going to dishonestly ignore facts which are plain in their face in order to further one of the silliest agendas out there.

Do you guys really want an Islamic Fundamentalist state prone to pissing off its neighbors to have nuclear weapons?

 

MSAM

4:11 PM ET

February 2, 2012

Israel recently tested the

Israel recently tested the nuclear capable jericho missile

Killing Iranian scientists on the streets of Tehran is terrorism

So....

 

SPOOD

4:17 PM ET

February 2, 2012

Do you have a link to the article about the test

Except there is no proof Israel is the one doing it. Plausible deniability works both ways.

Just like Iran can plausibly deny it is building nuclear weapons due to the lack of known evidence showing it, the same can be said about Israel's alleged hit teams.

...who somehow are able to operate in hostile territory for several years in a repressive regime with a well equipped and manned internal security apparatus to take high profile targets who undoubtedly would be the best guarded people in the country outside of the ruling clique.

The Mossad has to be pretty goddam amazing for such stories to even sound remotely plausible.

 

MSAM

4:26 PM ET

February 2, 2012

The test was on the news a

The test was on the news a few months ago. Google it. It was not a secret. And there is as much evidence for Israel's involvement in terrorism on Iran as there is evidence abou Iran's support for "terrorism"

 

MSAM

4:31 PM ET

February 2, 2012

And there is nothing high

And there is nothing high profile about the director of marketing at natanz The most recently murdered scientist. These attacks are in fact designed to create terror and insecurity in Iran because the numbers involved and the people targeted are not directly involved with the most sensetive nuclear work in Iran.

 

SPOOD

4:43 PM ET

February 2, 2012

Iran's support of terrorism is far more obvious

Despite your claims to the contrary, Iran doesn't even bother denying they support proxy forces in all the countries I mentioned.

Hezbollah, Hamas, and various Shia Militias are armed by Iran and extend Iranian political reach to the areas those various groups operate.

Again, there is no actual proof Israel is operating the alleged hit squads against Iranian scientists. It appears farfetched and easily accepted by those looking to blame Israel for anything under the sun. Its not like facts are something which that group particularly depends on.

 

MSAM

5:02 PM ET

February 2, 2012

Iran has always denied arming

Iran has always denied arming these groups. They only claim moral support for the groups you mentioned You may not believe the denials but you are wrong in not acknowledging it. And Israel's terrorism is obvious to those affected by it

 

SPOOD

5:43 PM ET

February 2, 2012

The state department disagrees with you

http://www.cfr.org/iran/state-sponsors-iran/p9362#p2

The U.S. Department of Defense estimates Iranian support to Hezbollah at roughly $100 million to $200 million annually (PDF).

It must be tough to try to find so many excuses for a religious fundamentalist dictatorship. After all such governments are considered so trustworthy and benign.

 

MSAM

6:22 PM ET

February 2, 2012

Iran has always denied arming

Iran has always denied arming these groups so your previous statement that Iran is not denying the armaments is false. if your arguement now is that what comes out of the US state department regarding Iran is objective facts then there is no point discussing the matter any further. and so called democracies that have started wars in the middle east responsible for hundreds of thousands of deaths, have proven themselves to be anything but "benign"

 

ORMONDOTVOS

3:52 PM ET

February 3, 2012

Facts have a bias.

And it isn't in favor of Israel.

 

MAIGARI

4:12 PM ET

February 2, 2012

The Mulllahs' Credit card

I dread to think what would have been the fate of ordinary Iranians now had Iran been connected in any way to the 9/11 tragedy. All this on mere 'suspicions' that Iran is pursuing a bomb and are alleged to have REFINED Uranium to 20% purity! The bomb we understand requires a 99%+ purity but NO, it is the Mullhas. Has anyone ever considered that Iranian democracy with all their imperfections is Heads and Shoulders aobve their American Allies in the GCC? Not suprising that many regard the US as a dictators haven in the region!

 

URGELT

5:45 PM ET

February 2, 2012

Enriching Uranium

Maigari,

You're making several errors here.

The first error is that Iran is "...alleged to have REFINED uranium to 20% purity!" Incorrect. Iran announced late last year that it had set up an enrichment line (centrifuges) for the express purpose of enriching uranium to 20% and had put it into operation. That they have done so isn't alleged, they announced it.

You went on to say, "The bomb we understand requires a 99% purity," implying that 20% enriched uranium is not a step towards obtaining nuclear weapons. Incorrect on two counts.

First, commercial reactors don't require uranium as highly enriched as the uranium now being produced in Iranian centrifuges. There is only one industrial purpose for 20% uranium: it's the second to last enrichment step for weapons-grade uranium.

Second, it's important to understand that the last enrichment step - from 20% to 99% - goes quickly. Once you have 20% uranium, it takes only a few months to convert it to weapons grade. The hard part is already over. (I know, this point seems counterintuitive to the layman, but it's true.)

By the end of 2012, Iran will have accumulated enough 20% enriched uranium for at least one, and probably several, nuclear weapons. Within about four additional months, give or take a couple of months (depending on how they set up the final enrichment centrifuges), they could have enough weapons-grade uranium for their first weapon.

I don't know where Iran is on warhead design and manufacture, or where they are on mating warheads to delivery systems, but it's clear they have created for themselves the option of having enough weapons-grade nuclear material on hand by mid 2013 for weapons manufacturing to proceed, should they decide to do so.

When will they have "the bomb?"

That is a question for which we have no ready answers. But since Iran is moving ahead quickly on 20% enrichment which will be useful only in weapons manufacturing, I think it's a mistake to presume they are not also moving forward with weapons design and tooling. It's also a mistake to presume that Iranian scientists, engineers and technicians are incompetent. I don't think they are.

A reasonable guess - but it's only a guess, I admit - is that Iran could have one or several weapons ready to deploy sometime in 2014. This projection presumes that Iran barrels ahead at its best speed and does not allow international sanctions to deter them.

If they decide not to proceed to produce nuclear weapons, they will have wasted a considerable sum of money producing 20% enriched uranium that has no commercial applications, not to mention enraged the international community and endured sanctions pointlessly.

Please understand, I am not - with this comment - attempting to argue against your points about democracy, dictators, etc. But we've got to comb the fuzzy, emotional and inaccurate cobwebs out of our arguments, if any rational discussion is to ever take place about Iran's nuclear ambitions.

 

MSAM

6:27 PM ET

February 2, 2012

20% uranium is required for

20% uranium is required for Iran's research reactor in Tehran this type of reactor is designed to produce medical isotopes

 

ORMONDOTVOS

3:55 PM ET

February 3, 2012

Thank you.

Remember when Canada had to shut down their medical isotope reactor, and world wide shortages of medical isotopes ensued?

Maybe that's a good reason why Iran wants to supply medical isotopes.

 

MSAM

4:14 PM ET

February 2, 2012

These sanction,s designed to

These sanction,s designed to hurt Iran's economy, are financial terrorism

 

TIMING

10:12 PM ET

February 2, 2012

a good read

http://www.jpost.com/IranianThreat/News/Article.aspx?id=256316

 

THEGRANDCHESSBOARD

11:28 PM ET

February 2, 2012

If Iran were to take care of

If Iran were to take care of Israel the remaining ZOG would scurry like rats then we could hunt them down like they did with the Nazis. Even if they were 90 years we could still drag them into jail like they did with Zundel

 

TIMING

11:41 PM ET

February 2, 2012

 

KARENYKARL

12:33 PM ET

February 3, 2012

Salvador Allende, anyone?

The idea of using SWIFT to embargo the Iranian regime smacks of nothing more than outright imperialism. The whole idea of embargoing Iran is to either promote a regime change in Tehran or an Israeli led or sponsored war with Iran.

This is pure and simple gunboat diplomacy, updated for the 21st Century. Instead of doing something sensible, like engaging the Iranians in no-holds barred, free ranging discussions, the oil (and financial) embargo is setting the world up for a horrible war. Israel is doing everything it can to jerk the USA around on Iran, and it appears to be succeeding. The problem is, that an airstrike against Iran is like getting a little bit pregnant. Truly, the Israelis don't know what &^$!! they're getting into. Magical thinking and ideology is at work here, and not realistic thinking.

As a matter of fact, SWIFT and oil embargoes are the best way of playing into the hands of extremists both in Tehran and Tel Aviv. The Zionists in Israel and DC will certainly find themselves with more than they can chew and digest if this lunacy against Iran continues.

 

ORMONDOTVOS

4:00 PM ET

February 3, 2012

Bad strategy, bad tactics.

Israel is playing out the end game of establishing a Jewish nation in the Muslim MidEast.

It won't end well. If an Iran strike brings on a nuclear exchange (which need not be airborne, remember) then the Jews worldwide will be the blame, right or wrong.

Israel is too small a nation in land area to be inviting a nuclear blast on their territory, and that's exactly what they're doing.

Nuclear chicken.

 

ORMONDOTVOS

4:01 PM ET

February 3, 2012

Bad strategy, bad tactics.

Israel is playing out the end game of establishing a Jewish nation in the Muslim MidEast.

It won't end well. If an Iran strike brings on a nuclear exchange (which need not be airborne, remember) then the Jews worldwide will be blamed, right or wrong.

Israel is too small a nation in land area to be inviting a nuclear blast on their territory, and that's exactly what they're doing.

Kosher nuclear chicken.

 

WEK1

10:08 PM ET

February 5, 2012

SWIFT Sanctions on Iran

I seem to recall the "Oil for Food" program in Iraq was suppose to rein in that country. What it did was create a massive black market that involved many nations and many people who hepled Iraq facilitate its financial transactions in spite of legal restrictions on those financial transactions. Those in power, stayed in power. Few, if any people invoved in these illegal transactions were prosecuted (I seem to recall a bunch of UN people were involved in circumventing these restrictions and were not prosecuted. Were'nt they the ones that should have been enforcing these financial sanctions?). When you have a commodity as in demand as oil, and one that looses its identity when it reaches international markets, you will have a very hard time controlling the country producing it. Not to sound too cynical, but with the current Iranian involvment in Iraq what do you bet that Iraq's oil production/sales will rise dramatically if the U.S. is able to impose these sanctions. It would sure be interesting if the rise in Iraq's oil production/sales just happenned to match what the Iranians produce? If you want sanctions, try these letters: N A V A L B L O C K A D E! And they will stil get a lot of their oil sold thru Iraq.

 

TOMMYER

9:35 AM ET

February 6, 2012

These transactions, the Wall

These transactions, the Wall Street Journal noted in a recent editorial, amounted to $35 billion in trade with Europe alone. And they almost certainly violate existing sanctions laws.floor steamer reviews Cutting off this source of cash could be hugely consequential for those who seek to peaceably halt the Islamic Republic from developing a nuclear weapon.

 

ALIFELIX

6:24 PM ET

March 2, 2012

Do Sanctions Work?

Cutting of SWIFT as part of the sanctions against Iran is very smart will be extremely effective. It is not the point of sanction to " destroy the Iranian economy"? The bigger question is do sanctions actually work or is it just international bullying. It looks like it worked with North Korea after the news earlier this week that I read on my iphone 5 where the country is giving up nuclear pursuits in exchange for limiting sanctions and providing food.