Sunday, November 04, 2007

Cutting Off Iran's Cash Flow

The dinosaur media isn't covering it much, but unilateral US sanctions against Iran are already having an effect.

Since the US has now blacklisted Iran's three main banks and the world's financial system flows through New York, most of the world's financial institutions are simply not doing business with Iran any longer, for fear of US retaliation.This is the same tactic used by the Bush Administration against Hamas...only with far more success, since Hamas essentially has no banking institutions of its own.

"Practically all the major European banks have ceased their cooperation with Iran," said an official from Iran's Export Development Bank, who asked not to be named.

"It is no longer possible to wire money by dollar into Iran and for the payments in euro there are just three European banks. They could stop cooperating with us at any moment," the official said.

British-Asian bank HSBC and the huge Swiss banks UBS and Credit Suisse have already cut all ties and cooperation with Iran and Deutsche Bank, Commerzbank and BNP Paribas cut all ties this year.

This is important, because the Iranian rial is toilet paper in the international currency market, and everything Iran imports has to be paid for in dollars or Euros.

Asian banks from countries like South Korea and China that still trade with Iran have also been imposing restrictions on doing business with the mullacracy.

"The big banks from China, one of Iran's most important partners, are now refusing to deal with Iran as they have important interests in the United States and fear reprisals," said Mehrdad Mahmoudi, a leading currency dealer.

Foreign banks are refusing to accept letters of credit drawn on Iranian banks or even to do simple wire transfers.

"Iranian banks can still use the services of small Asian banks or the Persian Gulf but that will not last forever," said Bijan Khajepour, director of Atieh Consulting in Tehran.

"Firms are increasingly having to pay in cash or go through a third country to import their goods which will make the finished product even more expensive," he said.

Strangely enough, one banking conduit that appears to not be cooperating is the World Bank, which has an almost $1 billion dollar loan to the Mullahs in the pipeline ready to be sent to Iran.

The president of the World Bank, Robert Zoellick refused a request from congressman Mark Kirk,(R-IL)who serves on the appropriations subcommittee that funds the World Bank to suspend the loans.Considering that the US is using its banking leverage to get other countries to stop financial dealings with Iran, Zoellick and the World bank appear to be deliberately undercutting US strategy, and one has to wonder why.

Zoellick's predecessor, Paul Wolfowitz certainly wouldn't have done it.

For now those loans remain up in the air as the appropriations committe and its chairperson, Nita Lowey ( D-NY) make a decision on whether to block the American portion of the funds or not. Knowing Congresswoman Lowey, I'd say there's a better than even chance. And if the US decides to block its portion of the funding, the Japanese, the EU and perhaps even the Saudis, who are the other donors, may too.

Meanwhile, the UN Security Council is debating a third round of sanctions agianst Iran....stay tuned...


Anonymous said...

I'd say there's a good chance that Lowey will block the funds. She tried to halt Bush's aid to the PA earlier this year.

Freedom Fighter said...

Exactly,Jon, and I wrote about it here when it happened.

Now that Wolfowitz has been demonized in the press and resigned and another `globalist' apparatchnik has become head of the World bank, you see the results.

Anonymous said...

I doubt anyone fears American reprisals as a reason not to do business with Iran. In fact, I think the nations of the EU as well as Russia and China could easily move the financial system out of New York at any time of their choosing.

The faxt that we are actually getting a small bit of cooperation here may be an indication of the absolute reprehensive nature of the Iranian regime. Of course with America demonized in the main stream news media and no one wishing to be accused of being subservient to the US any cooperation with the US would have to be low key.

The world community actually wants to side with Iran against the US, however, the absolute evil nature of the Iranian leadership is making it somewhat difficult for them to do so. If the US is to emerge victorious in the Global War on Terrorism it must act decisively to counter the vicious lies that have been spread about it.

Freedom Fighter said...

Hi Poster,
I hate to be disagreeable but you're mistaken on this one.

As you can read in the linked article, a number of banks have stopped doing business with Iran all over the globe, with more to follow..and here's why:

The world's entire banking system is interconnected and runs through NYC. NONE of these banks want to have US funds frozen, their directors and officers deposed, or records suppoenaed because they've been indicted for financing terrorism or laundering suspect funds.

Nor do they want to lose access to the lucrative US markets, or to be unable to finance dealings with US companiues who wish to comply with the law. Compared to the US, any money they can make on Iran is peanuts.

This is one area where the Bush Administration normnally gets good grades when it comes to the War On Jihad,interdicting terorrist financing...except, unfortunately,when it comes from th eSaudis or the UAE.