Business


Iran: Bank sanctions force business to find new ways to move money




Tehran, 9 May (AKI) - Iran's leading banks have been excluded for some time from international business because of sanctions imposed by the United Nations Security Council over the government's refusal to suspend uranium enrichment.

Many European and Asian banks, and especially the Americans, are closing the accounts of private citizens, even Europeans that live in Iran.

This week the Dutch bank, ING, told a British journalist from the Reuters news agency who has living in Tehran for a year, that his account at a Brussels branch would be closed.

The account was closed even though the journalist has never transferred a single cent from his account in Iran and has not even transferred any money that has come from the Islamic republic.

"The sole fact that the holder of the account lives in Iran, notwithstanding his nationality, means we are forced by the new arrangements to ask the client to transer his money to another banking institution," a spokesman for ING told Adnkronos International (AKI).

Considering the difficulties that European citizens have in sending money to Iran from any bank in Europe, it is strange that the flow of money into and out of Iran continues despite these limitations.

"We have gone back hundreds of years and are forced to fall back on a Medieval system," said Farhad, a young Iranian entrepreneur who imports clothing accessories from Italy.

The system to which he refers is called Hawala and is the same that uses illegal immigrants to send money to their families and terrorist organisations.

It is very simple, leaves no trace and costs little and it is certainly profitable for a network of international contacts.

The young Iranian entrepreneur went to one of the many moneychangers in Tehran in the central Piazza Ferdousi and asks to send 1000 euros to Rome. He was also charged 50 euros for the service.

Several minutes later the Rome correspondent had contacted Adnkronos on the telephone. An hour later the Rome correspondent who is an Armenian Turk , arrived at Adnkronos in Piazza Mastai with 1000 euros.

“This is the only way I can continue to import merchandise before delivery," he said.

The Hawala payments of Farhad are not 1000 euros, but tens of thousands of euros.

Jamshid, another entrepreneur who imports machinery from Germany, has to send money by the same system to Dubai where it is deposited in an account in one of the banks in the United Arab Emirates who issues a letter of credit to a German factory.

"The embargo and the restrictions can be overcome by the private sector, even if it increases the costs and reduced profits," said Jamshid.

"It is not the same for major projects and for state-owned enterprises that do not have the option of using the Hawala system to pay their international partners."

Meanwhile, this week Russia adopted new United Nations economic sanctions on Iran aimed at getting Tehran to suspend its nuclear enrichment activities.

The Kremlin announced Thursday that former President Vladimir Putin signed the sanctions into law earlier this week, just before stepping down to be replaced by Dmitri Medvedev.

The U.N. Security Council imposed a new round of sanctions on Iran in early March. They tighten existing sanctions on trade, the travel and assets of people involved in Tehran's nuclear and missile programs. They also call for increased vigilance over banks in Iran.

This is the third set of sanctions the Security Council has imposed on Iran for its refusal to halt uranium enrichment, a process that can be used to make nuclear weapons.

Iran maintains its nuclear programme is for peaceful purposes.


 

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