question: Why is it so hard for countries to build an alternative financial payments system to escape the impact of US third-party sanctions, like the sanctions on companies buying Iranian oil? If most major economies agreed to do this how could the USA prevent it?
comment: If most major economies agreed there wouldn't be much the US could do. **But** most major economies don't want to do that. Most major countries rely on the US to a huge extent, for things like defense, technology, and financial investment. The US is one of the reasons those major economies tend to play nice with each other, they aren't likely to cooperate against the US.
passages: The United States, having withdrawn from the JCPOA – better known as "the Iran Nuclear Deal" – has decreed severe sanctions against any nation trading with Iran. The new payments system is designed to remove certain banking transactions with Iran from the purview of U.S. authorities, and to escape U.S. sanctions against nations trading with Iran. The apparent goal is to encourage Iran to continue to adhere to the terms of the JCPOA, which forbids the testing, development and manufacture of nuclear weapons, even though no claims of breach have been made by any party of the JCPOA except the United States.
   Policies, procedures, and processes should include a review of the foreign financial institution’s processes for identifying and monitoring the transactions of subaccountholders and for complying with any AML statutory and regulatory requirements existing in the host country and the foreign financial institution’s master agreement with the U.S. bank. In addition, U.S. banks should have procedures for monitoring transactions conducted in foreign financial institutions’ PTAs.
  
  In an effort to address the risk inherent in PTAs, U.S. banks should have a signed contract (i.e., master agreement) that includes:
  
  Roles and responsibilities of each party.
   Section::::Financial architecture.:BRICS payment system.
  
  At the 2015 BRICS summit in Russia, ministers from BRICS nations, initiated consultations for a payment system that would be an alternative to the SWIFT system. Russian Deputy Foreign Minister Sergey Ryabkov stated in an interview, "The finance ministers and executives of the BRICS central banks are negotiating ... setting up payment systems and moving on to settlements in national currencies. SWIFT or not, in any case we’re talking about ... a transnational multilateral payment system that would provide greater independence, would create a definite guarantee for BRICS."
   The bill would direct the Secretary of the Treasury to prescribe reporting, information sharing, and due diligence requirements for domestic financial institutions that maintain a correspondent account or payable-through account in the United States for a foreign financial institution. Authorizes the Secretary to waive such requirements if in the U.S. national security interests, and with congressional notification.
  
  The bill would direct the Secretary of the Treasury to identify to Congress every 180 days each foreign central bank that carries out an activity prohibited under this Act.
  
  The bill would set forth penalty requirements for specified violations under this Act.
   Many consider the MTF business model unsustainable, although Alisdair Haynes, the Chi-X Europe CEO, said "We are not going to raise prices, though most people expect we have to".
  
  Section::::Impact on European trading.:Investment bank MTFs.
  
  Most investment banks run an internal crossing system. These systems cross clients' orders against one another, or fill the orders directly off the bank's book.
   The Office of Foreign Assets Control (OFAC) is an agency of the United States Department of the Treasury under the auspices of the Under Secretary of the Treasury for Terrorism and Financial Intelligence. OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations, and individuals.
   BIS CPSS is currently preparing for the new global standards for not only payment systems but also securities settlement systems, central counterparties and trade repositories. The new standards (Principles for FMI) is now under market consultation and going to be published in 2012.
  
  Section::::Core principles.
  
  A systemically important payment system (SIPS) should have:
  
  BULLET::::1. A well-founded legal basis
  
  BULLET::::2. Rules and procedures which enable participants to have a clear understanding of the system’s impact on each of the financial risks they incur through participation in it.
   A turning point was the 1997 Asian BoP Crisis, where unsympathetic responses by western powers caused policy makers in emerging economies to re-assess the wisdom of relying on the free market; by 1999 the developing world as a whole stopped running current account deficits while the U.S. current account deficit began to rise sharply.
   Remittances can be difficult to track and potentially sensitive to money laundering (AML) and terror financing (CTF) concerns. Since 9/11 many governments and the Financial Action Task Force (FATF) have taken steps to address informal value transfer systems. This is done through nations' Financial Intelligence Units (FIUs). The principle legislative initiatives in this area are the USA PATRIOT Act, Title III in the United States and, in the EU, through a series of EU Money Laundering Directives. Though no serious terror risk should be associated with migrants sending money to their families, misuse of the financial system remains a serious government concern.
   According to "The New York Times", the failure of the United States to carry out sanctions against many Iranian companies and individuals is cited by European diplomats as an example of America failing to do what it has promised. Valerie Lincy of Iran Watch has said, "The United States now lags many other countries in enforcing sanctions that the United Nations has already voted." The "Tehran Times" wrote that the U.S. Treasury has increased pressure on foreign banks not to deal with sanctions against Iran, including performing "U-turn transactions," which allow U.S. banks to process payments involving Iran that begin and end with a non-Iranian foreign bank.
   In February 2016, most Iranian banks reconnected to the network following lift of sanctions on Joint Comprehensive Plan of Action.
  
  Section::::U.S. government involvement.:U.S. control over transactions within the EU.
   BULLET::::- "Our overriding concern stems from the lack of progress made by the members of the Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR) to address several critical issues as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), enacted in 2010. That concern increases each day that the implementation of systemic risk reform languishes. A sense of complacency has made reforms for effective oversight seem less urgent despite escalating problems elsewhere in the global financial system. In many ways, the financial system faces larger potential challenges today than it did in the run-up to the 2008 crisis, given the troubled state of the European Union and uncertainties at home related to fiscal and monetary policy. It is essential that the FSOC show leadership in coordinating the rule-writing process to promote the development of cohesive, consistent regulations and provide clear and transparent explanations of the reforms in a way that is understandable to the general public. We have created this Council to assist in that effort."
   and there have been assertions, such as by Michael P. Dooley, David Folkerts-Landau and Peter Garber, that nations need to avoid the temptation to switch to protectionism as a means to correct imbalances.
   In April 2014, the U.S. Department of the Treasury and IRS announced that any jurisdictions that reach "agreements in substance" and consent to their compliance statuses being published by the July 1, 2014, deadline would be treated as having an IGA in effect through the end of 2014, ensuring no penalties would be incurred during that time while giving more jurisdictions an opportunity to finalize formal IGAs.
   In the immediate aftermath of the Bretton Woods collapse, countries generally tried to retain some control over their exchange rate by independently managing it, or by intervening in the foreign exchange market as part of a regional bloc, such as the Snake which formed in 1971. "The Snake" was a group of European countries who tried to retain stable rates at least with each other; the group eventually evolved into the European Exchange Rate Mechanism (ERM) by 1979. From the mid-1970s however, and especially in the 1980s and early 1990s, many other countries followed the US in liberalizing controls on both their capital and current accounts, in adopting a somewhat relaxed attitude to their balance of payments and in allowing the value of their currency to float relatively freely with exchange rates determined mostly by the market.
   Enforcement of the contract is particularly difficult in an international set up. It is hard for a creditor to impose sanctions to a country that defaults. Hence, it is a much deeper problem considering the consequences of imperfections in international capital markets. It may highly reduce the country's ability to extract financial resources on international basis. the most fundamental reason is the sovereign risk that causes from the lack of a supranational legal authority, capable of enforcing contracts across borders. The main results of imperfect international capital markets are similar to domestic ones: risk and insufficient level of investment. Since the inefficiency of the economy in terms of investment is also related to the economic growth of the country, the consequences on investment and economic growth are more severe and affects the economies of the countries (especially developing countries) in macro level.
   Foreign financial institutions’ use of PTAs, coupled with inadequate oversight by U.S. banks, may facilitate unsound banking practices, including money laundering and related criminal activities. The potential for facilitating money laundering or terrorist financing, OFAC violations, and other serious crimes increases when a U.S. bank is unable to identify and adequately understand the transactions of the ultimate users (all or most of whom are outside of the United States) of its account with a foreign correspondent. PTAs used for illegal purposes can cause banks serious financial losses in criminal and civil fines and penalties, seizure or forfeiture of collateral, and reputation damage.
   In September 2018 the European Union foreign policy head, Federica Mogherini, proposed the development of a new "special purpose financial vehicle" intended to bypass SWIFT. The seven founding members of this new system are to be Iran, the European Commission, Germany, France, the UK, Russia and China – but not the United States.
   The Better Than Cash Alliance partners with governments, companies, and international organizations that are the key drivers behind the transition to make digital payments widely available by:
  
  BULLET::::1. Advocating for the transition from cash to digital payments in a way that advances financial inclusion and promotes responsible digital finance.
  
  BULLET::::2. Conducting Research and sharing the experiences of our members to inform strategies for making the transition.
  
  BULLET::::3. Catalyzing the development of inclusive digital payments ecosystems in member countries to reduce costs, increase transparency, advance financial inclusion– particularly for women– and drive inclusive growth.
  
  Section::::Government members.
  
  Source:
  
  BULLET::::- Afghanistan
  
  BULLET::::- Bangladesh
   The use of formal methods by individual immigrants and workers in the U.S. has been increasing over the last decade, this can be attributed partially to a sharp decline in the average cost of formal money transfer systems, brought about by increased competition as more and more companies now offer their own international money transfer services. Another factor that has increased the use of formal methods has been the scrutiny which informal money transfers have come under. Since the September 11th terrorist attacks, Informal money transfer systems are believed the primary methods that terrorist organizations, or drug cartels receive funding from supporters in wealthier countries. New regulations included in the Dodd-Frank act, have also played a key role in maintaining a higher standard of accountability and reliability of service for licensed MTOs which has further increased their popularity.
   The World Bank has been paying increasing attention to payment system development as a key component of the financial infrastructure of a country, and has provided various forms of assistance to over 100 countries. Most of the RTGS systems in place are secure and have been designed around international standards and best practices. 
   The PWG Report also emphasized the desire to "maintain U.S. leadership in these rapidly developing markets" by discouraging the movement of such transactions "offshore." In the 1998 Congressional hearings concerning the CFTC "concept release" Representative James A. Leach (R-IA) had tied the controversy to "systemic risk" by arguing the movement of transactions to jurisdictions outside the United States would replace U.S. regulation with laxer foreign supervision.
   After the 2015 summit, the respective communications ministers, under a Russian proposal, had a first summit for their ministries in Moscow in October where the host minister, Nikolai Nikiforov, proposed an initiative to further tighten their information technology sectors and challenge the monopoly of the United States in the sector.
   In the slipstream of the Coase theorem, professionals increasingly focused on understanding the roles of transaction costs and the legal system in the economy. In particular, the focus was on institutions that could enable a reduction of transaction costs called New Institutional Economics.
  
  A great deal of the research has been based on the assumption that economic growth is reflected in the ease of doing business. Accordingly, a key recommendation is to develop institutions that reduce transaction costs and facilitate trade.
   While the current central role of the dollar does give the US some advantages, such as lower cost of borrowings, it also contributes to the pressure causing the U.S. to run a current account deficit, due to the Triffin dilemma. In a November 2009 article published in "Foreign Affairs" magazine, economist C. Fred Bergsten argued that Dr Zhou's suggestion or a similar change to the international monetary system would be in the United States' best interests as well as the rest of the world's. Since 2009 there has been a notable increase in the number of new bilateral agreements which enable international trades to be transacted using a currency that isn't a traditional reserve asset, such as the renminbi, as the Settlement currency.
  