As the US dollar is the international currency, US sanctions against regimes it does not like – those in Iran, Sudan and Cuba, for example – have enormous consequences. According to the Society for Worldwide Interbank Financial Telecommunication (Swift), more than 80% of world trade is denominated in US dollars, and so to have this lifeline removed is extremely serious.
Non-US banks once considered that they were not doing anything illegal by acting as a conduit for trade finance with sanctioned countries – after all, their home jurisdictions had not applied the sanctions. But as dollar transactions are likely to pass through the US at some point, banks doing this business, such as Standard Chartered and ING, have incurred the wrath of the US authorities and ended up with heavy fines.
