By Roberta Rampton
WASHINGTON (Reuters) - Senators agreed on Thursday to a plan that would pressure a global electronic platform used by the world's banks to stop providing services to Iranian banks blacklisted by the U.S. Treasury.
The proposed measure is part of a package of new sanctions passed by the Senate Banking Committee that lawmakers hope will further crimp revenues that they say Tehran is using to develop nuclear weapons. Iran denies seeking nuclear arms.
If accepted, the provision would push the White House to press SWIFT, the Society for Worldwide Interbank Financial Telecommunication, to shut out Iran's central bank and its other financial institutions from the infrastructure used for moving money between banks around the world.
"It is inconsistent and troubling that financial communications services providers continue to service those financial institutions" in Iran that are otherwise subject to sanctions, said the text of the measure, proposed by Democratic Senator Robert Menendez.
If the services provider failed to act, the measure would allow the Treasury Department to sanction Belgium-based SWIFT and the banks that own it 90 days after enactment. The final decision on sanctions would be left to the White House.
A SWIFT spokeswoman said earlier this week that the company is "neutral and apolitical" and noted it complies with all sanctions laws.
Cutting Iranian banks out of SWIFT would have a "very disruptive impact" on the banks' ability to do business, said Jeanne Archibald, partner with Hogan Lovells law firm in Washington, who advises international clients on sanctions compliance.
"SWIFT messages are kind of the glue for the worldwide banking system," Archibald said in an interview.
Iran's currency has fallen sharply in recent weeks because of sanctions from the United States and other Western nations, many of which target its ability to sell oil.
The SWIFT provision was part of a broad package passed by the Senate Banking Committee that also includes scrutinizing Iran's national oil and tanker companies with an eye to sanctioning foreign banks handling their transactions, and extending the reach of economic sanctions to foreign subsidiaries of U.S. companies.
Before the measures could take effect, the new bill would need to be passed by the full Senate and squared with existing legislation from the House of Representatives.
The bill would also have to be signed by President Barack Obama, whose administration is working through the complex details of implementing sanctions passed late last year aimed at crimping foreign financial transactions on Iranian oil sales.
The new package has the potential to affect banks, insurance companies, ship owners, energy and mining firms, and telecommunications equipment providers outside the United States doing business in Iran, the world's third-largest exporter of crude oil.
It represents the "next evolution" in expanding the extraterritorial reach of U.S. sanctions to companies outside the U.S. border, said Hogan Lovells' Archibald. "It's just a tightening of the screw, if you will," said Archibald, who was general counsel for the Treasury Department during the George H.W. Bush administration.
(Editing by Russell Blinch and Mohammad Zargham)