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Iran Sanctions: Wiring Fund

Conducting business on an international scale is often associated with risk, requiring flexibility and the ability to adapt quickly to changing legal conditions like economic sanctions. However, the complexities of international sanctions regulations set by different countries lead to challenges with international wire transfers and potential legal repercussions.

So, are you still 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 specializes in complex transactions under OFAC Sanctions Programs and other sanction regimes. We analyze the objectives and structure of the wire transfer, prepare the necessary documents, interact with banks and regulatory authorities. Thanks to our expertise, you can avoid unlawful asset blocking, ensure compliance with OFAC requirements, and reduce the risk of sanctions being applied.

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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 to this country safely and legally. Indeed, extensive OFAC Iran Sanctions create certain difficulties in conducting financial transactions since there’s no direct banking relationship between the US and Iran. However, 31 CFR § 560.550 directly specifies the procedure for carrying out non-commercial personal transfers under strict compliance with several conditions.

According to 31 CFR § 560.550, non-commercial monetary transfers are permitted provided they are not intended for commercial purposes, related to business, and do not finance prohibited operations. That means you can wire money for personal remittances like family assistance, friends, and emergency support. However, wire transfer fees from Iran are higher compared to domestic wire transfers since there is no direct banking relationship and funds have to be processed by a third-country bank.

Wire transfers must be carried out through exchanges, securities broker-dealers, or registered depository institutions (e.g., banks, and credit unions licensed by the relevant regulators in the USA or abroad). Financial intermediaries like the receiving bank are required to comply with identification rules and verify whether the transaction violates the sanctions regime (AML/KYC procedures).

Such transfers mustn’t be connected with commercial or any other suspicious activity. That includes buying and selling goods, investing in Iranian enterprises, supporting organizations 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 organizations 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 account 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 wire 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 or a third country bank outside Iran. 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.

When conducting money transfers to or from Iran under the current sanctions regime, it is essential to consider both legal risks and the requirements set forth by OFAC. While personal remittances are permitted, entities and individuals must ensure full compliance with all applicable regulations, including mandatory KYC/AML procedures. It is crucial to thoroughly verify the counterparty, the purpose of the transfer, and the source of funds to avoid breaching sanctions laws. Failure to adhere to these requirements may result in severe consequences, including fines, asset freezes, and legal penalties. In case of any uncertainties, seeking advice from OFAC attorneys specializing in international law and sanctions compliance is strongly recommended.

Are Wire Transfers to Iran Allowed?

Like traditional translations, electronic translations are subject to strict OFAC control.

All Iran wiring funds transfers originating from the USA (or controlled by US financial institutions) are considered prohibited unless there is an appropriate license from OFAC. This applies to both bank transfers and electronic payment systems.

American banks and payment services are required to block transactions that violate sanctions against Iran. Failure to comply with the rules threatens the remitting bank with large fines, so financial institutions prefer to strictly control any transfers.

OFAC issues two types of licenses regulating operations with Iran:

  • General License;

A general license is a general authorization allowing certain groups of operations to be carried out without an individual application to OFAC. This category includes humanitarian transactions, the supply of pharmaceuticals or food products. Any action that does not fall within the scope of a specific general license remains prohibited:

  • Specific License;

A specific license is permission to conduct a certain operation, issued based on the review of an individual application. To obtain this type OFAC license it is necessary to collect the following documents for application:

1. Detailed description of the operation (purpose, amount, involved parties).

2. Identification details of the parties (name, address, contact information).

3. Financial documents confirming the source of funds and the final destination.

4. Cover letters or justifications explaining the necessity of the transaction.

5. Additional documents (contracts, invoices, or other transaction-related agreements).

Write an application in the prescribed form indicating information about the applicant, the purpose of the transaction, and its compliance with the sanctions exception, as well as the grounds on which you are requesting a special permit. All documents and the application must be prepared in English.

The application is submitted to the OFAC Licensing Division. This can be done via the OFAC online platform or by post.

The processing time for the application may vary from several weeks to several months, depending on the complexity of the operation and the volume of information. OFAC will notify the applicant of its decision.

If approved, the applicant receives a special license specifying the conditions to wire money. In the license, OFAC usually indicates the maximum permitted amount, categories of recipients, and specific purposes of the transfer. Any deviation beyond these limits is prohibited and requires updated authorization.

Even after obtaining a license, the bank or payment system will closely monitor transactions, checking compliance with the conditions. Upon request from OFAC, they are obliged to provide documentation and justification for each transaction. In cases where the financial institution doubts the legality or purpose of the payment, it may temporarily block the transfer until it receives the necessary explanations from the client and/or OFAC.

Our legal company will help assess risks, prepare an application for a special licence, and develop a payment scheme compliant with sanction requirements.

Please contact our OFAC attorneys to discuss your case and legal options, assess potential risks, and explore the best course of action ➜

How an OFAC Lawyer Can Help if Funds Are Returned?

Under the strict sanctions regulations 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 license, inaccuracies in documents, or incomplete understanding of OFAC rules:

  1. Non-compliance of the transaction with established exceptions. When transferring funds with sanctioned jurisdictions, a special or general license is required. If money is sent without the appropriate authorization, the bank may freeze the payment and return the funds;
  2. 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;
  3. 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;
  4. 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 specializing in sanctions legislation will analyze 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 with explanations. Your lawyer will also 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 programs), 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 since it’s important to prove that the transaction does not violate sanctions or comply 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.

Organizations that frequently conduct transactions with sanctioned entities must carry out systematic audits to identify potential vulnerabilities. As part of the audit, specialists analyze payment documents, transfer routes, counterparties, and compliance with sanction lists.

Consultation with lawyers specializing 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.

Dr. Anatoliy Yarovyi
Senior Partner
Anatoliy Yarovyi holds a Doctorate in Law and earned his Master’s degrees from Lviv University and Stanford University. He was also among the candidates for a position as a judge at the European Court of Human Rights (ECHR). His expertise lies in representing clients before the ECHR and Interpol, particularly in cases involving extradition, protection of personal and business reputations, data privacy, and freedom of movement. He also specializes in the topic of OFAC and economic sanctions.

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