Former Government Officials, Policy Experts Support SWIFT Sanctions on Iran

Washington, D.C., October 16, 2018 – A group of 30 former government officials and Iran experts, in a statement released today, urged the Trump administration to fully enforce U.S. sanctions on banks represented on the board of directors of the SWIFT financial messaging service if the service does not disconnect the Central Bank of Iran (CBI) and all re-designated Iranian financial institutions.

The statement, which comes as European diplomats are seeking ways to evade U.S. sanctions on Iran, recommends the Trump administration sanction the banks if SWIFT does not complete the disconnection by Nov. 4, 2018.

Among the signatories are former Sen. Joseph Lieberman; former U.S. Attorney General Michael Mukasey; Amb. Robert Joseph, former U.S. Special Envoy for Nuclear Nonproliferation; former National Security Advisors Richard V. Allen and Robert McFarlane; Mary Beth Long, former Assistant Secretary of Defense for International Security Affairs; Rebeccah L. Heinrichs, Hudson Institute senior fellow; Elliott Abrams, former deputy assistant to the president and deputy national security to President George W. Bush; David Asher, former senior advisor to the U.S. Special Operations Command for counter threat finance and counter network operations; John Cassara, former clandestine operations officer and former Treasury Department special agent; Jamil Jaffer, former chief counsel and senior advisor for the Senate Foreign Relations Committee; and Scott Modell, senior adviser to U.S. Special Operations Command on counter-threat finance issues related to Middle Eastern terrorist groups and state sponsors of terrorism.

“Failure to achieve the disconnection of such banks from the SWIFT financial messaging system would fall short of President Trump’s stated goal of imposing maximum pressure on the Islamic Republic and would make it easier for the regime to endure the re-imposition of U.S. sanctions,” the group writes. “At a minimum, we expect President Trump to resume all sanctions that were in effect under President Obama prior to the interim deal known as the Joint Plan of Action.  That includes the disconnection of the Central Bank of Iran and designated Iranian financial institutions from SWIFT.”

On May 8, 2018, following President Trump’s announced withdrawal from the Iran nuclear deal, the Department of Treasury warned that sanctions would be imposed on SWIFT unless it disconnected the CBI and all other re-designated Iranian banks by Nov. 4, 2018. As that deadline approaches, European diplomats desperate to save the Joint Comprehensive Plan of Action (JCPOA) and undermine the Trump administration’s maximum pressure campaign are reportedly stepping up their campaign to deter the Treasury Department from acting.

Prior the interim nuclear Iran deal in late 2013, top U.S. officials, including Secretary of State Hillary Clinton, Secretary of Treasury Tim Geithner, Federal Reserve Chairman Ben Bernanke, Under Secretary of State Wendy Sherman and Under Secretary of Treasury David Cohen, publicly described the immense power of SWIFT sanctions against Iran. Since May, when President Trump announced he would re-impose sanctions on Iran, European leaders have publicly discussed various sanctions evasion schemes to maintain the JCPOA, which would rely heavily on Iran’s continued access to the SWIFT system.

FDD recently released a Frequently Asked Questions guide authored by FDD’s chief executive Mark Dubowitz on the use of U.S. sanctions to target financial messaging services to Iran.

The signed letter submitted to the Trump administration today:

“We, the undersigned, urge the Trump administration to fully enforce U.S. sanctions with respect to the provision of financial messaging services to the Central Bank of Iran and all designated Iranian financial institutions. Failure to achieve the disconnection of such banks from the SWIFT financial messaging system would fall short of President Trump’s stated goal of imposing maximum pressure on the Islamic Republic and would make it easier for the regime to endure the re-imposition of U.S. sanctions.

In 2012, the mere threat of U.S. sanctions against banks represented on the board of SWIFT forced the service to disconnect Iranian banks. At the time, SWIFT sought political cover from the European Union and arranged for an EU regulation ordering it to act. That regulation, however, was unnecessary since SWIFT’s corporate rules already allow for the suspension of users found to be involved in illicit activities. Today, given the EU’s opposition to the re-imposition of U.S. sanctions, the Trump administration must demonstrate its willingness to enforce sanctions targeting SWIFT’s board and compel the service to act on its own accord – just as it did last year when SWIFT disconnected North Korean banks without an EU regulation.

We note that prior to the Senate Banking Committee’s consideration of SWIFT sanctions in 2012, the Obama administration warned Senators that such sanctions would jeopardize America’s counterterrorism cooperation with SWIFT, potentially disrupt SWIFT service for American banks and propel China and Russia to establish a credible alternative to SWIFT. After the sanctions were adopted, however, these warnings proved false. Given the close working relationship between SWIFT and career U.S. officials, we are not surprised to learn that these warnings are being recycled – used this time to deter President Trump from exercising his authority under the law.

The imposition of financial sanctions on individuals who serve on SWIFT’s board of directors would not interrupt SWIFT’s operations and would not harm U.S. financial institutions that rely on SWIFT (especially if the representatives from the American banks on the board make it clear that they support the expulsion of Iranian banks from the system). Nor would such sanctions jeopardize ongoing U.S.-EU SWIFT counterterrorism cooperation, which benefits the security of all European citizens. Furthermore, we do not believe legitimate persons will find attractive any alternative to SWIFT that cannot use dollars and may itself be subject to U.S. sanctions.

We remain hopeful that in coming months, the United States and Europe can resume close cooperation in countering the range of threats posed by the Islamic Republic. But a maximum pressure campaign should be just that: maximum pressure. A campaign that does not exert maximum pressure and leaves available opportunities to more easily evade U.S. sanctions cannot be considered a maximum pressure campaign. At a minimum, we expect President Trump to resume all sanctions that were in effect under President Obama prior to the interim deal known as the Joint Plan of Action. That includes the disconnection of the Central Bank of Iran and designated Iranian financial institutions from SWIFT.”

Signed

Elliott Abrams
Richard V. Allen
David Asher
Ilan Berman
Josh Block
John Cassara
Michael Doran
Mark Dubowitz
Jamie Fly
Reuel Marc Gerecht
Rebecca L. Heinrichs
Jamil Jaffer
Amb. Robert Joseph
Orde Kittrie
Dr. Robert J.  Lieber
Sen. Joseph Lieberman
Mary Beth Long
Michael Makovsky
Clifford D. May
Robert McFarlane
Scott Modell
Judge Michael Mukasey
Clarine Nardi Riddle
Michael Pregent
James Rickards
David Rivkin
Jonathan Schanzer
John Simon
Ray Takeyh
Amb. Mark Wallace