How to send money and receive money from Iran for trade & business?

How to send money and receive money from Iran for trade & business?

Which Iran sanctions are lifted and what does this mean

This article is about payments for business transactions. For sending money to family and personal transactions, please check elsewhere, like this article.

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New U.S. sanctions in force since November 2018

In November 2018, U.S secondary sanctions on Iran came into full force, since then Europe and other signatories of Iran Nuclear Deal have been trying to maintain the trade with Iran. However sending or receiving money remains the most difficult part of doing business with Iran.

Unfortunately at the present time and due to the U.S sanctions on Iran, there are a lot of problems with using standard banking solutions in order to transfer money to and from Iran. However in non-sanctioned industries there is still a chance to benefit from the conventional banking solutions. Currently Iran is using its banking connection with neighboring countries in order to import basic goods and materials to Iran.

Consequences for businesses

International banks and financial institutions are still at risk of prosecution by the Department of Justice if they are based in the USA or use the US dollar. These prosecutions can be civil or criminal and are mostly substantial. Quite a number of major banks have been fined hundreds of millions of dollars for violating these sanction regimes. To avoid this risk, many banks have made the decision not to deal with Iran even when the transaction is completely legal in their home country. (source: Blackstone solicitors)

As an effect, for the Iranian government and for many companies, large funds remain inaccessible, and doing business with Iranian companies, although greedy to buy, remains difficult due to lack of foreign currency. Many of them will ask for flexible payment terms that will allow them to capitalise on their new investment before paying you.

For companies who want to do business in Iran, it is therefore important to work with a reputable local partner who if familiar with international payments and who also can assess the credit risk of delayed payment.

 

Letters or credit and guarantees

Before the sanctions, a variety of LCs were used in Iran to import and export, but after sanctions were imposed on the country, Iranian banks lost their credibility and merchants and artisans turned to a way other than LC to pay and receive their money.

However currently some Iranian banks through their daughters companies in some countries which have good financial ties with Iran are offering LC services to facilitate the business with Iran.

The cost of sight LCs in Iran is as follows:

LC Issuance (Sight / Usance) 0,15% of Bill amount , for 3 month
Export Doc L/C,payment commission,SWIFT 0,15% of Bill amount
LC Amendment Commission -Extension of Validity Date (over 3 month) 0,05% of Bill amount per month on excess portion

Payment restrictions on the Iran side

Due to the lack of Euros in Iran for payments to foreign companies, the Iranian government has also imposed restrictions on Iranian bank. A per April 2018, all foreign exchanges are managed through the banking system with the government rate and banks sell Euros only to importing companies and those who are traveling abroad. Importing companies need to show the original invoice, which has to be attested by the Iranian embassy in the issuing country.

Working solutions for transferring money to and from Iran

Alliance experts has compiled a report from various data sources with working solutions for transferring money to and from Iran. In this report we focus on:

  1. International financial institutions
  2. Iranian owned banks in foreign countries
  3. Foreign banks in Iran
  4. Foreign exchange companies

The report also contains a list of bank in various countries who do business with Iran, but in general are reluctant to take on new clients.

Order the report 'How to transfer money to and from Iran' now for 100 EUR!

 

What to expect in the report?

Table of contents:

1.      Introduction 3
1.1    Instex 3
1.2    Iran foreign currency exchange market 4
2.      Letter of credit and bank guarantee 4
2.1    List of banks which has done business with Iran 5
3.       Working solutions for transferring money to/from Iran 8
3.1    International financial institutions 8
3.2    Iranian owned banks in a limited countries 9
3.3    Foreign banks in Iran 12
   Standard Chartered PLC 12
   Islamic Cooperation Investment Bank 12
   Iran-Venezuela Bi-National Bank 12
   Future Bank 13
3.4    Foreign Exchange Companies ( FECs) 13
4.     Comparison of solutions 14

 
Tables:

  • The cost of sight LCs in Iran
  • Banks that are still doing business in Iran
  • Iranian owned banks abroad and where they have branch offices
  • list of the most active Foreign Exchange Companies in Iran

 

This entry in Asia was updated on May 2, 2019 by specialist.