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Transferring money to Iran under UN sanctions
Monday, 04 February 2008
International Money transfers to and from Iran has become increasingly difficult because of the last UN sanctions since the start of 2007. As we experienced many European banks have implemented restrictions in dealing with most of the Iranian banks such as Melli bank and Mellat bank. As it turned out you’ll need a go-between bank to send money to Iran. But there’s also another route we discovered.

UN sanctions on money transfers

In 2007 UN sanctions have restricted transactions of European banks with Iranian banks. Not going into the details of these restrictions it has undoubted caused a huge work-around between Europeans and Iranians. Bills must be paid, and as we’ve seen Iran still moves although it’s probably with a lot more paperwork.

For any traveler the restriction mean making a estimate of how much money you’ll spend in Iran. For a short stay that’s not so difficult, but when staying for 2 months uncertainty adds a lot to any estimated budget. Specially when you’re moving around with your own transportation.

Money transfer from Europe to Iran

In December 2007 we tried to make a international bank transfer from the Netherlands to Iran for an Iranian friend. In short, all routes we tried failed even with help from people inside the banking system. Our Dutch bank uses the Deutsche Bank in Germany to transfer money to Iran. And this bank has implemented the UN sanctions against Iran since 2007.

We first tried an international bank transfer over the Internet (Electronic Banking) using the BIC code of the bank in Iran. Our bank could confirm the BIC code so everything matched. Even the Melli bank branches in the big Iranian where all listed it seemed like a functional system. Unfortunately the transfer bounced back after a day with “incorrect or missing bank transfer details”. After inquiries at our bank it was because the Deutsche Bank refused to process the money transfer.

Failed money transfer due to sanctions

The international department of our bank also refused to make the money transfer to a Melli Bank outside Iran. Apparently their own rules didn’t allow transfers to branches of bank Melli outside Iran. Implemented UN sanctions intervened here also.

Go-between bank in Dubai

Next we tried the work-around route, transfer money through a go-between bank which has no implementations of the last UN sanctions. Such as the Standard Chartered Bank in the UAE in Dubai. Unfortunately without a bank account at that bank it’s a very difficult process to make this possible with phone, fax and internet.

Melli bank branches outside Iran

The easiest way we discovered was a deposit by some-one at a Melli Bank Branch outside Iran. There’s a Melli bank in Hamburg – a little far from the Netherlands but as an emergency solution not totally impossible.
[NOTE:: This route might be blocked now due to new international banking restriction in the European zone ]
Anyhow it wasn’t an emergency so we decided to leave it with that. With Dubai on our travel map we got the chance to do the deposit ourselves.

Melli bank branche in Dubai

In Sharjah in the UAE we tried to make a deposit at the local Melli bank branch. This again was not possible because only the main Melli branch in Dubai accepts such deposits. Instead we got an address in Sharjah of an Iranian version of Western Union. In fact it was a money exchange business run by Iranians. We decided to take a chance with them – they seemed pretty legit.

Iranian Money Transfer office in Dubai

As ever with money changers, the Dirham – Rial exchange rate they used was a bit lower than we expected. Secondly they charge a deposit processing fee and on top of that they can’t transfer fractions of 10.000 Rials. Anyhow – it all was done in a few minutes.  The deposit would arrive the next day. And so it did – the exact amount in Rials arrived as promised.

Preparing for the worst

Looking back with all this in mind an emergency would involve some-one to make a cash deposit at a Melli bank branch outside Iran or to use an Iranian run money transfer business. The problem with the latter is to find one which is reliable when you’re not able to be there in person – specially when there are problems or when it involves a lot of money.  

Iranian money transfer business

On a next visit to Iran we definitely will make a few inquiries to find an Iranian money transfer business with reliable credentials while the UN sanctions are still effective. Doing so would make it a lot easier when there’s a money problem when we’re inside Iran. Secondly we'd never deposit a large amount on the first try, using small(er) amounts reduces risk and provides some feedback how long a transfer takes. Third we'd have to instruct someone outside Iran to make the deposit -that takes some time too to get things right. Fourth we need to establish a contact at a Melli Bank inside Iran to announce a money transfer. Alternatively one needs a reliable contact in Iran with a bank account at the Melli bank.

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