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U.S. Bank Sanctions Will Hit Iran Where It Hurts
(Bloomberg) Eli Lake - Sanctions on Iran's banks, oil exports, ships and ports, lifted in 2015, were reimposed on Monday. It was not clear until Friday whether those banks would be allowed to participate in the Society for Worldwide Interbank Financial Telecommunication, or Swift. That is the system that allows the world's banks to communicate with one another, making global transactions possible. Treasury Secretary Steve Mnuchin announced: "We have advised Swift that it must disconnect any Iranian financial institution that we designate as soon as technologically feasible to avoid sanctions exposure." Mnuchin said that some Iranian financial institutions that were not sanctioned could remain on Swift, but only to conduct transactions involving food and medicine. Swift is a big deal. Isolating Iran from it compounds its financial crisis. Even if companies were willing to risk being cut off from the U.S. economy to purchase Iranian oil, it will be almost impossible for Iran to receive the payments if its banks aren't part of Swift.