SWIFT

Society for Worldwide Interbank Financial Telecommunication
legal form	Limited Liability Cooperative
founding	1973
Seat	La Hulpe , Belgium
management	Javier Pérez-Tasso ( Chief Executive Officer )
Branch	Finance
Website	www.swift.com

The Society for Worldwide Interbank Financial Telecommunication , SWIFT for short , is an organization founded in 1973 and based in Belgium that operates a particularly secure telecommunications network (the SWIFTNet), which is used by more than 11,000 banks worldwide. In addition, SWIFT defines message standards and offers software and services in the area of financial transactions. SWIFT is a cooperative owned by the banks and subject to EU law.

Within the network, the participating institutes are identified by the BIC (Business Identifier Code). It is also known as the SWIFT code in the financial industry .

tasks

SWIFT forwards transactions between around 11,000 banks, brokerage houses , stock exchanges and other financial institutions in around 200 countries via SWIFT messages and thus handles the secure messaging and payment transactions of the affiliated companies and institutions.

In 2017, 26.71 million SWIFT messages were sent per day. The daily volume of money transferred was around 6 trillion dollars (4.8 trillion euros) in 2005 and increased to around 35.62 trillion euros in 2018.

The network had an availability of 99.999 percent in 2017. Legally secured payment transactions across national borders are now practically only possible with SWIFT.

Bodies

Executive Committee

The board is headed by Javier Pérez-Tasso and consists of eight people. He is appointed by the Board of Directors and is responsible for day-to-day business.

Board of Directors

The board of directors is to control and supervise the management . He thus takes on the function of a supervisory board and has little influence on day-to-day business. The board consists of 25 members. These are mostly representatives of major international banks, including two each from the USA, Great Britain, France, Belgium and Germany. One representative each comes from Canada, South Africa, Russia, China, Japan, Singapore, Italy, the Netherlands, Spain, Sweden, Luxembourg, Denmark and Australia. With 17 members, Western Europe has a majority on the Supervisory Board.

Supervisory bodies

In addition to the Board, the central banks of the G10 countries (United States, Belgium, Germany, France, Great Britain, Italy, Japan, Canada, the Netherlands and Sweden) have a supervisory role.

Headquarters of the cooperative

The headquarters are in La Hulpe , Belgium . There are operating centers (OPC) in Zoeterwoude , the Netherlands , in Culpeper (Virginia), USA and in Diessenhofen , Switzerland .

The OPC in Switzerland was provisionally put into service in Zurich-Altstetten in 2009 in order to create a decentralized message architecture that takes European data protection concerns into account. Since the rooms in Zurich were only rented, SWIFT built its own, largely underground operations center in Diessenhofen. After a year of construction, the center was completed in 2013.

technology

SWIFT standardizes the communication between financial institutions. SWIFT only transports messages, but does not keep accounts for the partners and - in contrast to TARGET2 or EBA CLEARING - does not settle any payments. Hundreds of message types (MT abbreviation for message type ) are defined for data exchange. In a creeping process, these are replaced by message types in XML format (MX messages). The SWIFT messages include:

Payments , etc. a. the EU standard transfer

Cover purchases from securities and foreign exchange transactions

Account statements for mutual accounts between credit institutions

Payment advices with details of the cover addresses

Advices of letters of credit openings

Securities transactions

The SEPA transfers (in XML ISO 20022 format) are not part of the MX messages. SWIFT is only a line provider here. The European Payments Committee (EPC) is responsible for the message standard. Communication takes place via a secure network, the SWIFTNet. The large credit institutes usually maintain dedicated lines for connection to this network.

SWIFT network / SWIFTNet

Between 2001 and 2004, SWIFT converted its infrastructure from an X.25 network to an IP-based network, SWIFTNet. This change enabled the use of many software and technologies available for IP networks. This new network allows SWIFT to offer other methods of data transmission over the secure network in addition to the traditional FIN service.

Since November 17, 2018, all participants in Switzerland must use ISO 20022 ; FIN messages are no longer used there for payment transactions. The SWIFT InterAct Service is now used.

FileAct

FileAct is a method for exchanging any files between the participants of the SWIFTNet. The following transmission options are already in use:

Bilateral exchange of payment transaction data between banks and companies - comparable to an FTP transfer over a secure network. This can be done on the one hand in the common formats, such as. B. DTAUS (domestic payments), DTAZV (international payments) or in the new SEPA format, but also in proprietary formats that the counterparties agree on beforehand.
Exchange with clearing houses such as the Deutsche Bundesbank in fixed formats and procedures, e.g. B. SEPA or electronic bulk payments (EMZ)

SWIFT services

SWIFTNet FIN (MT messages)
SWIFTNet MX (new MX messages)
SWIFTNet FileAct (file transfer via secure IP network from SWIFT)
SWIFTNet Browse (HTTP (S) via secure IP network from SWIFT)

standardization

SWIFT works together with international organizations to define the message formats and content and is the registration authority (abbreviation RA stands for registration authority ) for the following ISO standards :

ISO 9362: 1994 Banking - Banking telecommunication messages - Bank identifier codes (see following section)
ISO 10383: 2003 Securities and related financial instruments - Codes for exchanges and market identification (MIC)
ISO 13616 : 2003 IBAN Registry
ISO 15022: 1999 Securities - Scheme for messages (Data Field Dictionary) (replaces ISO 7775)
ISO 20022-1: 2004 and ISO 20022-2: 2007 Financial services - UNIversal Financial Industry message scheme

In RFC 3615, the namespace urn: swift : was defined for Uniform Resource Names (URNs).

SWIFT code

A unique designation format was created for the participating financial institutions for payment transactions in the SWIFT network. SWIFT assigns a BIC (also called SWIFT code) to each bank ; BIC is the abbreviation for English Business Identifier Code . SWIFT members can register a same structured code for non-SWIFT members (z. B. connected operations or large industrial firms) at SWIFT, which then AT ( english Business Entity Identifier is). The structure of the BIC is described in ISO 9362 in an internationally standardized form. It is used worldwide by banks , brokers , depositaries and companies.

The BIC or SWIFT code has a length of 8 or 11 alphanumeric characters and the following structure:

BBBBCCLLbbb
BBBB	4-digit bank code, freely selectable by the financial institution
CC	2-digit country code according to ISO 3166-1
LL	2-digit coding of the location
bbb	3-digit identification (branch code) of the branch or department (optional)

Example: MARKDEFF (or MARKDEFFXXX) is assigned to the headquarters of the Deutsche (DE) Bundesbank (MARK) in Frankfurt am Main (FF).

SWIFT Customer Security Program

As of 2017, SWIFT will carry out an annual security audit due to an attack in 2016. Since then, all SWIFT participants have had to submit to an annual health check.

SWIFT and politics

Disclosure of confidential information to US and European authorities

Since the terrorist attacks on September 11, 2001 in the USA , SWIFT has been transmitting confidential data about financial transactions to US authorities. In press reports there are talk of 20 million transmitted bank data per year. Immediately after the attacks, the US government approached the SWIFT leadership via the CIA , FBI , Treasury Department and the US Federal Reserve . This followed the request voluntarily. The 25-person SWIFT Board of Directors and a control committee, which also included a member of the Deutsche Bundesbank , were informed of the events. As the dpa reported, SWIFT tried to obtain approval for the data transfer, but the central banks questioned did not react. The New York Times , which exposed what had happened, questioned whether the practice was legal. For example, the civil society network “Aktion Finanzplatz Schweiz” sees the transfer of data as a violation of Swiss banking secrecy . The Bush administration justified the action with the " war on terror ".

SWIFT itself admitted in 2006 to have submitted certain transaction data to the US Treasury Department; With the help of the cash flows, Riduan Isamuddin (called Hambali) could be captured. In Germany, the Independent Center for Data Protection Schleswig-Holstein (ULD) has initiated an investigation into whether the transfer of data has breached banking secrecy and data protection. In a press release by the ULD it is said: “It cannot and must not be that the Federal Constitutional Court rightly sets clear limits for the German security authorities in so-called non-suspicious checks on everyone and that the US government is then allowed to go through the detour of a Belgian service provider in the dark to fish and ignore freedoms and civil rights. ”In both Germany and Austria, SWIFT received the negative Big Brother Award for passing on the data .

In October 2006 it became clear that the management of Booz Allen Hamilton , the supposedly independent external consultancy of SWIFT, consists of the ex- CIA boss James Woolsey and the ex- NSA director John Michael McConnel. According to official information, large amounts of data from the SWIFT system are also transmitted to the CIA.

The SWIFT data center in Diessenhofen, Switzerland

At the end of March 2008, SWIFT announced that it would be setting up a new data center in Switzerland in the Zurich area. The commissioning of the new data center, originally planned for the end of 2009, was implemented according to plan so that the European payment transaction data no longer had to be mirrored in the operating center in Culpeper located in the USA . This is intended to prevent the US authorities from accessing the transaction data. Starting in 2010, a new building of its own for the Zurich Operating Center was built in Diessenhofen . Commissioning took place in 2013.

The Belgian Data Protection Commission dealt with the case for two years and came to the conclusion on December 9, 2008 that SWIFT had no choice but to hand over the data to the American Treasury. The suspicion that SWIFT had seriously violated Belgian or European law has not been confirmed. The commission published a detailed report and closed the procedure.

At the end of July 2009, the EU foreign ministers decided to give terrorists in the United States access to European bank accounts. They tasked the European Commission with negotiating an agreement . The agreement failed because it was rejected by the European Parliament on February 11, 2010 with a clear majority.

With a decision of March 24, 2010, the European Commission received a preliminary mandate for renewed negotiations. On June 28, 2010, the parties finally signed an agreement that, after a compromise, also takes into account the wishes of the European Parliament. The evaluation of the European data in the American Treasury Department will in future be monitored by an EU official. In addition, a separate European system for monitoring payment data is to be introduced over the next five years, so that in future the USA will only be able to transmit its own search results.

During a review of the implementation of the agreement by the Europol Joint Supervisory Body (JSB) at the beginning of March 2011, the latter found that the data protection requirements were not being met and that there were therefore serious concerns about compliance with data protection guidelines. In particular, the justification of the requests for the transmission of data by US authorities, which was sometimes only verbal, made it impossible to review the processes.

Interruption of data traffic with Iranian banks (2012 - 2016 and since 2018)

On Saturday, March 17th, 2012, at 16:00 GMT , international data traffic between SWIFT and Iranian banks was blocked for the first time in the history of SWIFT, in order to confirm the sanctions of the European Union , the European Council , against Iran by the Belgian Ministry of Finance sufficient because of the nuclear program sanctions. Iran's foreign trade then collapsed. In accordance with European and Belgian law, SWIFT has removed the Iranian banks from the international payment messaging system; Since then, payments with Iran can only be exchanged through the transfer of cash across borders and via smaller Iranian banks that have not yet been blocked. Smaller transfers can also be processed through Iranian companies that are registered as domestic companies in Turkey, as well as through the hawala system. Since SWIFT is the main hub with which banks network internationally, European banks without SWIFT have since then been unable to establish a connection with the important Iranian credit institutions. Since February 19, 2016, the Europäische-Iranische Handelsbank AG in Hamburg, which is indirectly owned by the Iranian government, as well as the majority of the commercial banks in Iran, has been connected to the SWIFT system again and the processing, in particular of letters of credit transactions, is again possible.

Kerstin Kohlenberg and Mark Schieritz from the weekly newspaper Die Zeit presented the effect of the exclusion from SWIFT as serious damage to the Iranian economy, which the Iranian government had forced to the negotiating table. The measure was the greatest success so far of Daniel Glaser, who is responsible as Assistant Secretary (Terrorist Financing) in the Department of Terrorism and Financial Intelligence of the US Treasury Department for the "war with the resources of the financial market".

In the course of 2018, following the cancellation of the nuclear deal with Iran by the United States , the US government's national security advisor, John R. Bolton, and US Treasury Secretary Steven Mnuchin , in particular, increased the pressure on SWIFT, Iranian banks once again from SWIFT communications uncouple. In contrast to the 2012–2016 blockade, however, there were no EU sanctions or international resolutions binding SWIFT. The EU finance ministers tried to encourage SWIFT not to take any measures in order to be able to maintain the nuclear deal.

Nevertheless, SWIFT decided to block numerous relevant Iranian banks in the network again on November 12, 2018.

Desired suspension of the SWIFT agreement with the United States

Due to the NSA spying affair , the European Parliament demanded on October 23, 2013 that the SWIFT agreement with the United States be suspended. Documents from the whistleblower Edward Snowden revealed that the US secret services had secretly "tapped" the Swift network on several levels.

Attempted to influence SWIFT

Since countries depend on SWIFT for their international payment transactions, the organization also plays a central role in questions of sanctions. As the SWIFT cooperative announced in October 2014, it was asked to block international payments with Russia and Israel. SWIFT then announced: “SWIFT and its shareholders were called upon to shut down individual institutions and even entire countries from the system. This mainly affects Russia and Israel. [...] SWIFT will not take unilateral decisions to isolate financial institutions from its system under political pressure ... Since SWIFT is based in the EU, SWIFT fully complies with European law ... Every decision, sanctions against individual countries or Imposing facilities is entirely up to the relevant government bodies and legislative branches. "

In order not to fall victim to sanctions, Russia introduced a SWIFT-compatible system - in a version for the national bank , the SPFS , and in the open form as a CyberFT service offer. CyberFT advertises with halved transaction costs and some other advantages over the SWIFT offer.

Cyber attacks

In 2016, criminals tried several times to break into the data traffic of the global payment system and sent fraudulent messages with captured user data. In a successful attempt in February 2016, they stole at least $ 81 million from the central bank of Bangladesh .

Web links

SWIFT company (English)
SWIFT - Payments Issues.de
Regulation (EC) No. 2560/2001 of the European Parliament and of the Council of December 19, 2001 on cross-border payments in euros
BIC directory of SWIFT, search mask (English)
The SWIFT Agreement (PDF; 156 kB)

Individual evidence

↑ SWIFT Management at swift.com, accessed February 7, 2016.

↑ ^a ^b SWIFT: SWIFT About Us. Retrieved February 3, 2019 .

↑ SWIFT FIN Traffic & Figures . In: SWIFT .

↑ What is SWIFT? The daily newspaper , from June 24, 2006

↑ Swift GPI transfers: over 3,500 banks with more than 40 trillion US dollar transactions in 2018 it-finanzmagazin.de, accessed on May 21, 2019.

↑ ^a ^b Ulrich Nettelstroth: Payment freeze from Tehran. Transfers between Iran and Germany are no longer possible / Bank blockade hits Brandenburg exporters. In: Märkische Allgemeine. March 23, 2012, archived from the original on April 26, 2012 ; Retrieved April 4, 2012 .

^ Javier Pérez-Tasso appointed as SWIFT Chief Executive Officer. April 24, 2019, accessed May 30, 2019 .

↑ Organization & Governance. Accessed September 4, 2018 .

↑ Organization & Governance . In: SWIFT . ( swift.com [accessed September 4, 2018]).

↑ ^a ^b SWIFT is ready to implement sanctions against Iranian financial institutions . ( Memento of November 7, 2012 in the Internet Archive ) (PDF; 22 kB) SWIFT press release, February 17, 2012

↑ SWIFT Supervisory Board approves new system architecture ( memo of November 19, 2009 in the Internet Archive ) and Distributed architecture ( memo of September 17, 2015 in the Internet Archive ) SWIFT

↑ Banking organization Swift is building data center in Zurich inside-it.ch, accessed on May 21, 2019

↑ Dieter Ritter: Swift: Construction started. In: Thurgauer Zeitung Online. March 18, 2012, accessed April 12, 2013 .

↑ Dieter Ritter: Starting signal for the data center. In: Thurgauer Zeitung Online. March 15, 2013, accessed April 12, 2013 .

^ SWIFT company information ( memento of December 19, 2008 in the Internet Archive ), accessed on September 7, 2008.

↑ SWIFT History swift.com, accessed May 21, 2019

↑ System interfaces. In: six-group.com . Retrieved January 20, 2019 .

^ Maintenance agencies and registration authorities . In: ISO .

↑ RFC 3615 - A Uniform Resource Name (URN) Namespace for SWIFT Fin

↑ Customer Security Program swift.com, accessed August 21, 2020

↑ US government has international financial data network monitored . heise online , June 23, 2006

↑ Control in the US: Swift voluntarily gave out account details . Handelsblatt.com , January 13, 2014.

↑ Is the USA also circumventing German banking secrecy? , golem.de, July 18, 2006

↑ Foreign transfers from Schleswig-Holstein banks using SWIFT. In: datenschutzzentrum.de. Independent State Center for Data Protection Schleswig-Holstein, 23 August 2006, archived from the original on 5 July 2007 ; accessed on February 27, 2017 .