Iran sends cash and fighters to aid Bashar al-Assad in the Syrian civil war. It schemes to obtain illicit nuclear materials. It backs a range of insurgent and terrorist proxies across the Middle East. This behavior isn’t new—it’s been happening for years and is what led the Trump administration to withdraw from the ill-conceived Iran nuclear deal in May.
The United States is scheduled to reimpose pre-deal sanctions on November 4. This will involve cutting off Iranian banks, including the country’s central bank, from the global economy. Over the last several months, the administration has successfully pressured energy companies worldwide to cut ties with Iran, and it has imposed fresh penalties designed to punish Tehran for human rights abuses.
But a key question remains: Will the United States move to cut off Iran from SWIFT, the financial network critical for money transfers between countries? Taking that step would make it much harder for the regime to obtain hard currency or transfer funds to entities outside its borders, thus handicapping its ability to fund terror proxies. Suspension from SWIFT—the Society for Worldwide Interbank Financial Telecommunication—is one of the most stringent economic penalties available and was essential in bringing Iran to the nuclear negotiating table in 2012.
SWIFT may choose to disconnect the Iranian banks on its own before the November deadline. If not, the United States could penalize its board of directors, an option endorsed by 30 former officials and policy experts in October. It was the possibility of congressional sanctions against its board that pushed SWIFT to boot Iran six years ago. As cover at the time, the Belgium-based institution cited a request from the European Union, which then supported sanctions against Iran. Today Europe is working hard to keep Barack Obama’s nuclear deal alive and is opposed to suspending Iran from SWIFT. But access to global economic services is an earned reward, and no state that actively supports terrorism and foreign insurgencies ought to have it.
So dedicated are the Europeans to preserving the economic benefits that are flowing Iran’s way from the nuclear deal that they’re proposing various ways to avoid U.S. sanctions. Among them: an alternative to SWIFT. Such a vehicle would not have access to the U.S. financial system and might still be subject to U.S. sanctions, but it would allow the world’s leading state sponsor of terrorism to continue engaging in cross-border financial transactions.
As the November 4 deadline approaches, there are reports that suggest some in the Trump administration, led by Treasury secretary Steven Mnuchin, are opposed to pressuring SWIFT to expel Iran in the face of strident E.U. opposition. This is no time for such diplomacy. The mullahs have been anything but diplomatic since signing the 2015 deal and should not be allowed to drive a wedge between the United States and Europe.
It’s true, of course, that cutting Tehran off from SWIFT will severely damage the country’s economy and punish many Iranians who aren’t complicit in the regime’s malign behavior. But the country’s rulers bear the responsibility for that pain. A financially crippled Iran would find it much harder to fund subversive proxies and wreak havoc across the region. Keeping Iranian banks connected to SWIFT, meanwhile, would make it that much easier for the regime to outlast the U.S. pressure campaign.
The fundamental mistake of the 2015 Iran deal was that it ignored the regime’s support for international terrorism. The current administration was right to scuttle the deal, but it must embrace its own logic and put a full stop to Iran’s terror-imperialism.