Very little international banking commerce happens without the SWIFT system, a Belgium-basesd messaging network that has become the gold standard for international banking communications. This has understandably given SWIFT enormous power, as any bank that loses the ability to access SWIFT is hardly a bank at all.
And while SWIFT has long resisted efforts to be turned into a toll of diplomatic coercion, flat out refusing to cut off sanctioned banks in a lot of cases, today North Korea has lost the last of its access to the system, with the announcement that the last four banks still connected were all cut off because they failed to meet unspecified “operating criteria.”
This comes not long after the Belgian government had demanded that SWIFT cut off all North Korean banks that are under sanctions, and these four banks were the only ones not under direct sanctions. The move to cut out the whole country, virtually unprecedented, is fueling speculation of diplomatic pressure on SWIFT, though EU officials denied it was from them.
Even if it isn’t the result of some country or countries putting pressure on SWIFT, the perception that it is is expected to fuel more calls, particularly from nations like the US, from SWIFT to single out their enemies for them. This not only is a huge blow to North Korea, but risks making SWIFT’s task of being a politically neutral facilitator for international commerce that much harder.