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Swift System in Iran

Posted on Posted in Business Guidelines

One of the most vital systems of international section of all banks is swift system which makes possible the financial messages correspondences between domestic and foreign correspondents. The system is under the supervision of Belgium swift institute and banks can use the system services by joining the institute.

Many Iranian banksĀ also joined the institute officially on 90sand applied swift system and started inter-bank financial correspondences in an international level by the system.

Beginning of international sanctions

  1. From the year 2004, swift institute required that the kind of telecommunication protocol used by members shall change from X25 to IP for which executing SwiftNet project became mandatory for all users including Iranian banks. Executing the project requires being equipped with some tools, technology and special conditions that lacking each of them leads to a delay in executing the project and consequently faces banks with being fined.

The main and most important required equipment and technology includes:

  • The presence of one of four internet service providing companies of the world, introduced by swift institute in Iran as Network Partner
  • Preparing VPN Box hardware by members which is confirmed by swift institute
  • Preparing SNL and PKI software

As none of the selected companies including T&T.Infonet are present in Iran and preparing VPN Box is not possible due to sanctions so two main necessities for executing the project were not available to Iranian banks.

Following correspondences between central bank and swift institute, the only way for setting up the project is through intermediary institutes under the title “Service Bureau (SB)” that these institutes can indirectly connect to swift network by SB. Finally, after negotiations between central bank and several SBs, swift institute introduced AEG located in Lebanon as the SB for Iranian banks to be still connected to the network.

To be continued…

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