Blocking SWIFT transfers crippling Iran's economy

JERUSALEM - Israeli Finance Minister Yuval Steinitz said Sunday that blocking Iran's access to the international bank transfer system SWIFT could potentially force the collapse of the Iranian economy.

"A modern economy cannot function without international clearance, as well as an increasingly tight financial siege," Steinitz said in an interview with the Army radio, adding that the move would "make importing and exporting very difficult" for Iranian banking institutions to transfer oil revenues from abroad.

In a move to support the European Union's tightening of economic sanctions on Teheran, the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) on Saturday barred 30 Iranian financial institutions from using its services, which were considered a mainstay of the international commerce.

SWIFT CEO Lazaro Campos said the step was a "direct result of international and multilateral action to intensify financial sanctions against Iran."

Steinitz called the move "dramatic" and said that his ministry "will continue to promote worldwide economic sanctions and measures to hinder the commercial and financial activities of Iran."

While Steinitz said he was not sure if the SWIFT cutoff would succeed in compelling Iran to abandon its controversial nuclear program, Israeli Deputy Prime Minister and Minister of Regional Development Silvan Shalom was more optimistic.

"Iran is progressing with its nuclear weapons program in order to safeguard the regime's rule. But the moment that the sanctions become this severe, first with oil and now with (money) transfers, perhaps we will get to a point where they will understand that only abandoning the program will allow the regime to survive," Shalom said.

"We already don't do transfers using documents. Everything is done by international (electronic) transfers. What will they do now? Carry around suitcases with gold?" Shalom said.

Iran has repeatedly denied Israeli and Western charges that its nuclear program has military purposes, saying that its nuclear enrichment activities are meant for power generation and manufacturing medical isotopes.

"I think the United States intelligence services and the West know that we are not after building nuclear weapons," Mohammad Javad Larijani, secretary general of Iran's High Council on Human Rights, said last week in reaction to the ban on fund transfers.