‘Iran’ as a weapon of subordination

‘Iran’ as a weapon of subordination
By Vijay Prashad – 29 February, 2012 – Asia Times

The United States has taken steps to pressure its allies outside Europe to move away from imports of Iranian oil. US State Department spokesperson Victoria Nuland specifically mentioned India and China when saying on February 21 that her government was “having talks with countries around the world about the implications of the [sanctions/embargo] legislation with regard to our expectation that countries will increasingly wean themselves of dependence on Iranian oil.”

Asked about an opinion piece from former Under Secretary of State Nicholas Burns, who wrote that India’s decision to continue trade with Iran “isn’t just a slap in the face for the US – it raises questions about its ability to lead”, Nuland brushed Burns off as “a private citizen”.

The commercial pressure on India has begun to show. The Indian Export Credit Guarantee Corporation, which underwrites the risk

of Indian exporters, said that it would not halt insurance cover for exports to Iran but that it is become “very cautious” and “will try to keep our exposure at the minimum level.”

With the Turkiye Halk Bankasi unable to provide third-party financial intermediation and with Dubai-based middlemen unable to easily deal with Iranian firms, about US$3 billion in Iranian arrears against Indian traders have built up since December 2010. These commercial headaches have soured India-Iran business relations.

On February 24, SWIFT, the main financial messaging service for international money transfers, threatened to cut Iran out of its network. The Society for Worldwide Interbank Financial Telecommunications (as SWIFT is less commonly known) deals with about 10,000 member banks and transmits 17 million financial messages per day. In 2010, 19 banks and 25 financial institutions in Iran transmitted 2 million messages through the SWIFT network.

Based in Brussels, SWIFT is vulnerable to the upcoming European embargo of Iran. Its corporate leaders, Yawar Shah (Citigroup) and Stephan Zimmermann (UBS), are ingrained in the Atlantic financial architecture and unwilling to stand up to the political pressure from their capitals. Avi Jorisch, a former US Treasury official told Bloomberg, “This is a financial equivalent of warfare.” SWIFT has never before expelled a country in this fashion.

Commercial fears among Indian traders and political pressure from Washington has moved the Indian government to seek refuge in Saudi Arabia. Saudi Assistant Minister for Petroleum Affairs Abdul Aziz Bin Salman bin Abdulaziz came to India and met India’s Minister of State for Petroleum and Natural Gas, R P N Singh, on February 23. Abdulaziz noted that Saudi would be glad to increase sales of oil to India, and that if India were to approach Saudi Aramco, its needs would be covered. …more