(Bloomberg) -- Swift has dealt a “harsh blow” to free trade by suspending Iranian banks from the financial messaging network that connects the world’s lenders, according to Europe’s largest mechanical engineering industry group.
“Swift is the lifeblood of international payments,” Thilo Brodtmann, executive director at Germany’s VDMA association, said in a statement. “Any restriction, however small, on the neutrality of this system is unacceptable. Today Iran, tomorrow Russia and then China?”
The U.S. has ramped up sanctions targeting Iran’s energy and banking sectors as part of the Trump administration’s “maximum pressure” campaign against the Islamic Republic. Swift has said its move is in the interest of keeping the global financial system stable after senior U.S. officials said that it could be penalized if it authorizes payments between sanctioned entities.
Excluding Iran from Swift will have the knock-on effect of making transactions with Russia and other countries involved in political disputes unreliable, according to the VDMA, which represents more than 3,200 firms.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at email@example.com
To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at firstname.lastname@example.org, Iain Rogers, Chris Reiter
©2018 Bloomberg L.P.