Iran Sanctions: Wiring Funds
Conducting business on an international scale is often associated with risk, requiring flexibility and the ability to quickly adapt to changing conditions. Are you planning financial operations and transfers with partners or counterparties from Iran? Under the current OFAC sanctions, such activities require special attention and legal support. Incorrect risk assessment or lack of knowledge about sanction exemptions can lead to significant fines, fund freezes, and even criminal liability.
Our legal company specialises in complex transactions falling under OFAC Sanctions Programs and other sanction regimes. We analyse the objectives and structure of the transfer, prepare the necessary documents, interact with banks and regulatory authorities. Thanks to our expertise, you will be able to avoid unlawful asset blocking, ensure compliance with OFAC requirements, and reduce the risk of sanctions being applied.
How to Process Funds via Wire Transfer from Iran?
Many citizens and residents with ties to Iran often wonder whether it is possible to transfer funds with this country safely and legally. Indeed, extensive OFAC Iran Sanctions create certain difficulties in conducting financial transactions. 31 CFR § 560.550 directly specifies the procedure for carrying out non-commercial personal transfers under strict compliance with a number of conditions.
According to 31 CFR § 560.550, non-commercial monetary transfers are permitted provided that they are not intended for commercial purposes, are not related to business, and do not finance prohibited operations. This refers to ordinary transfers for personal needs: assistance to family, friends, support in emergency situations.
Transfers must be carried out through exchanges, securities broker-dealers, or registered depository institutions (e.g., banks, credit unions that are licensed by the relevant regulators in the USA or abroad). Financial intermediaries are required to comply with identification rules and verify whether the transaction violates the sanctions regime (AML/KYC procedures).
It is important that such transfers are not connected with commercial activities: the buying and selling of goods, investing in Iranian enterprises, supporting organisations from the Black List, etc. The amount of the transfer and its frequency are also monitored by financial institutions and OFAC to prevent sanction evasion schemes.
The current sanctions regime is aimed at preventing financial support for organisations suspected of extremism, as well as protecting the financial system of the United States. OFAC seeks to close loopholes that allow Iranian business structures and the SDN List to receive funds bypassing frozen assets and disguised transactions.
To transfer funds from Iran or vice versa, it is necessary to find a bank or registered depository institution that adheres to OFAC rules. If needed, seek advice from a financial intermediary: it is in their interest to check for any prohibitions or suspicious issues.
You may need to confirm the purpose of the transfer, your connection with the recipient, the source of funds, and also provide identification details.
A financial institution initiates a payment through a correspondent bank. If you are sending money, the specified funds must undergo verification for compliance with 31 CFR § 560.550. When receiving a transfer from Iran to the USA, the bank will also check whether the transaction violates the sanctions regime.
Keep receipts, confirmations, and correspondence that can confirm the legitimacy of the transaction. If OFAC becomes interested in the transaction, you will have evidence for explanations.
How an OFAC Lawyer Can Help if Funds Are Returned?
Under the strict sanctions regime against Iran, transactions with local entities may be subject to blocking or return of funds. However, not all cases are a direct result of intentional violation of the law. Often, the reasons lie in the absence of the necessary licence, inaccuracies in documents, or incomplete understanding of OFAC rules:
- Non-compliance of the transaction with established exceptions. When transferring funds with sanctioned jurisdictions, a special or general licence is required. If money is sent without the appropriate authorisation, the bank may freeze the payment and return the funds;
- Errors in documentation. Several incorrect lines in the payment order, lack of detailed information about the recipient, issues with SWIFT codes — all this may lead to the financial institution considering the operation suspicious and halting it;
- Joint violation of sanctions. In accordance with 31 CFR § 560.211, assets or transactions associated with the participation of “entities jointly violating sanctions” are subject to freezing. Even indirect involvement in a transaction by a person from the OFAC Black List may force the bank to return the money;
- Audit. Fearing fines, banking structures often apply heightened due diligence control measures. If they have the slightest doubts about the legitimacy of the transaction, the payment may be declined or returned.
A lawyer specialising in sanctions legislation will analyse the details of the return: reasons, accompanying documents, the positions of the bank and OFAC. This will help identify whether there was an error in the documentation or actual signs of sanctions violations.
If the transaction simply requires additional information or clarifications, the solicitor will prepare letters, explanations, and gather the necessary documents so that the payment can be safely processed again.
If interaction with Iranian counterparties is necessary (for personal transfers, non-commercial purposes, or special programmes), an individual OFAC licence may be required. A lawyer will handle the application process, preparation of business plans, and justifications for the regulator.
Often, the decisive factor is communication with the bank: it is necessary to prove that the transaction does not violate sanctions or complies with one of the general licences. A lawyer will be able to take on the negotiations, ensuring proper interaction between all parties.
To avoid repeated mistakes, the OFAC lawyer will develop a set of standard documents and procedures (KYC, counterparty checks, payment order forms) that will help to correctly conduct settlements in the future and avoid freezes.
Our company has experience and expertise in matters of interaction with OFAC, preparing the necessary applications, and conducting negotiations with banks. If you have encountered a funds return or want to protect your transactions from blockages in advance, contact us. We will provide qualified assistance, prepare documentation, and ensure compliance with all requirements of sanctions legislation.
Comply with U.S. OFAC Sanctions
OFAC regularly imposes multimillion-dollar fines on banks, payment systems, and private companies caught circumventing or violating sanctions against Iran. In particularly severe cases, even criminal liability or blocking access to the American financial system is possible.
The publication of facts about sanctions violations often leads to a loss of clients and partners, as well as distrust in future deals. In the context of the international market, companies and individuals cannot ignore OFAC requirements, as they risk losing important financial instruments and accounts in banks operating in US dollars.
Any transaction deemed suspicious may be blocked indefinitely, resulting in the loss of control over financial assets until all circumstances are clarified.
Organisations that frequently conduct transactions with sanctioned entities must carry out systematic audits to identify potential vulnerabilities. As part of the audit, specialists analyse payment documents, transfer routes, counterparties, and compliance with sanction lists.
Consultation with lawyers specialising in sanctions law will help the company avoid irreversible consequences and protect its reputation. Lawyers will assist in preparing OFAC licences, check counterparties, interact with banks, or represent interests in potential disputes.
Contact OFAC Lawyer
Our lawyers verify the legality of the operation, analyse the purposes of the transfer and the recipients to ensure that the transaction does not violate sanction regulations.
An independent attempt to resolve issues with banks and regulators often drags on, and any mistake can be costly. A legal expert will significantly speed up the process and reduce the likelihood of rejection or blockage.
If you are planning a money transfer to Iran or faced with a frozen transaction, you should not resolve complex legal issues on your own. Contact our OFAC Lawyer right now, to receive professional support and ensure compliance with OFAC requirements.
