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Cold reality of mooted Swift bans for Israeli and South African banks – The Mail & Guardian

Any attempt to prohibit access to the secure financial messaging network could backfire.

Over the past few years, Western governments have demonstrated a willingness to impose Swift  bans on the banks of states that severely violate international norms. 

These are extremely coercive measures since Swift is the secure financial messaging network that international banks rely on to facilitate cross-border transfers. Although workarounds have been attempted, prior Swift bans have severely affected the ability of banks in targeted independent states from accessing international markets.

Since the 7 October attacks, a number of South African commentators have suggested that the government of South Africa should try to impose a Swift ban on banks in Israel. 

Terry Crawford-Browne has even argued that such a ban would not only be justified, it would receive “almost unanimous support” in the international system.

There is no doubt that a Swift ban on banks in Israel would have a devastating effect on the local economy that would probably hasten the end of the military intervention. 

But there is similarly no doubt that the Netanyahu administration would view any attempt by a foreign government to impose a Swift ban on its banks as effectively a declaration of war and respond accordingly.

The problem is that logic could play into the hands of malicious actors in the international system who have been on the receiving end of Swift bans in the past (for example, Iran and Russia). 

Seeking retribution, those independent states might find that it is in their interest to try to get a third country to lead the campaign for a Swift ban on banks in Israel. 

Even if the campaign did not achieve the imposition of a ban, the campaign would probably drive a new wedge between the United States and some other Nato and major non-Nato allies.

At face value, it might seem that South Africa would make a good target for those seeking retribution but wanting to avoid the firing line themselves.

The Ramaphosa administration has already demonstrated a willingness to launch a genocide case against Israel before the International Court of Justice. With the proper incentives, Tehran and Moscow might think that they could persuade ANC elites to pursue a Swift ban as well.

The problem with that line of thinking is that the Ramaphosa administration is not stupid. 

Even if it supported the idea of a ban, President Cyril Ramaphosa knows that the cards would be hopelessly stacked against his government if he ever made such a move. 

Given the current support for Israel in Berlin and Washington, any South African campaign to impose a Swift ban on banks in Israel would almost certainly be unsuccessful and the blowback of that failed attempt would be enormous.

Those who are advocating for such a campaign therefore need to understand that it is much more likely that there will be a ban on South African banks than Israeli banks anytime soon.

The Trump administration is laser focused on putting maximum pressure on Iran and Iranian proxies. 

President Donald Trump and his senior advisers would have no qualms about targeting South African financial institutions that might be involved in evasion networks for US-sanctioned entities.

In Washington, there are conservative elites who believe that South African banks were regularly used to transfer illicit funds to US-sanctioned entities under the prior administration. 

Critically, that includes Iranian entities and US-designated terrorist organisations. 

The question is whether those hypotheses can be proved.

The European Union and United Kingdom will be much more hesitant to impose a Swift ban on South African banks than the US.

Their resistance may dissipate if their leaders were presented with strong evidence of illicit transfers through South African banks by malicious actors that are undermining their own national security and foreign policy interests though, for example, Russia.

Still, a Swift  ban on South African banks would probably be a bridge too far. 

Even if the Trump administration was willing to roll the dice, neither the British nor the Europeans are likely to be willing to run the risk of facilitating a Brics alternative to the Swift payment system.

Michael Walsh is a non-resident senior fellow at the Foreign Policy Research Institute. The views expressed are his own.


Crédito: Link de origem

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