Reconnection will allow cross-border payment transactions
Some Iranian banks have been reconnected to the Belgium-based Society for Worldwide Interbank Financial Telecommunication (Swift) network, allowing interbank and cross-border payment transactions to take place four years after they were cut off from the system as a result of EU sanctions.
The on-boarding process including administrative measures and technical measures for all non-sanctioned Iranian banks including the Central Bank is now completed, a statement by the Iranian Central Bank said.
Some of these banks international subsidiaries and branches are still undergoing the on-boarding process, although the Iranian Central Bank did not specify which.
The re-entry of Iranian banks into Swift, which took place two weeks later than the expected date, is one of the first steps required in reintegrating Iran into the global economy and will facilitate the return of normal banking business in the Islamic Republic.
The Swift platform is used to transmit payments and letters of credit and Irans four-year exclusion stunted its ability to conduct foreign trade and money transfers.
The four-year hiatus from Swift greatly impacted Iranian traders. Nobody could pay Iranians via normal lines, not even in euros, a Europe-based trader told Reuters.
A guide to sanctions still in place on Iran
While US primary sanctions (applicable to US individuals and entities) generally remain in place, the passing of the Iran nuclear agreements Implementation Day on 16 January has heralded the lifting of nuclear-related secondary sanctions on the Islamic Republic, applicable to non-US companies.
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