Cross-border payment body SWIFT resists Iran precedent

The United States is seeking tougher scrutiny of banking transactions and oil shipment financing with Iran, which it accuses of seeking to develop nuclear weapons.

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A U.S. Senate Bill, if it becomes law, would direct the White House to press SWIFT to drop Iranian banks, and would give the Treasury Department the power to sanction SWIFT and the banks that own it.

Nineteen banks and 25 connected institutions from Iran sent and received some 2 million messages in 2010. They included banks the U.S. accuses of financing Iran's nuclear programme or terrorism - Mellat, Post, Saderat and Sepah.

Faced with outside pressure, SWIFT's typical response has been: don't shoot the messenger. The Belgium-based body, involved in 80 to 90 percent of all global payments, is keen to point out that it does not carry out transactions and is only a messaging system, more akin to a telephone service, which U.S. lawmakers are not targeting. SWIFT does not hold accounts for members and does not perform clearing or settlement.

"We are not a bank and do not hold funds. Our member banks are responsible for the content of these messages and complying with applicable financial sanctions; they are not monitored or controlled by SWIFT," the cooperative said in an email exchange.

However, it said last week that it was working with U.S. and EU authorities to resolve the issue.

"This is a complex situation," it said, adding the impact on the global financial payments system and the flow of humanitarian aid to Iran required careful thought.

SWIFT has faced tests of its independence before.

After the United States and European Union had imposed sanctions on Myanmar in the 1990s over its human rights record, SWIFT faced NGO pressure to shut out the country's banks.

SWIFT's response then as it is now was that it is just a common carrier.