Iran’s supreme leader, Ayatollah Ali Khamenei, did not enter into Tuesday’s historic deal with six world powers to reset relations with the West. It was the promise of more than $100 billion in sanctions relief, rather, that greased the wheels of the recently completed diplomacy in Vienna. And though the windfall of cash will certainly strengthen its position, the real prize for Iran was regaining access to a little-known, but ubiquitous banking system that has been off-limits to the country since March 2012.
SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is the electronic bloodstream of the global financial system. It is a member-owned cooperative comprising the most powerful financial institutions in the world, which allows more than 10,800 financial companies worldwide to communicate securely. It’s hard to find a bank that doesn’t use SWIFT to communicate with other banks — unless, of course, you’ve lived in Iran for the past few years.
SWIFT disconnected 15 Iranian banks from its system in 2012 after coming under pressure from both the United States and the European Union at the height of the effort to curb Iran’s nuclear ambitions. It was a major blow to Tehran. Sure, it was how Iran sold oil, but it was also how Iranian banks moved money. According to SWIFT’s annual review, Iranian financial institutions used SWIFT more than 2 million times in 2010. These transactions, according to the Wall Street Journal, amounted to $35 billion in trade with Europe alone.
To make matters worse, the agreement just reached in Vienna grants more than $100 billion in cash to Iran, which could flow to the coffers of terrorist groups and rogue actors like Hezbollah, Hamas, Palestinian Islamic Jihad, the Houthis, and Syrian President Bashar al-Assad’s regime in Damascus. At the president’s press conference on Wednesday, Obama dismissed this fear, claiming the money would not be a “game-changer” for Iran. It’s hard to understand his logic: This infusion of cash will relieve budgetary constraints for a country already spending at least $6 billion annually to support Assad. For a country with only $20 billion in fully accessible foreign exchange reserves prior to November 2013, this is hugely significant.