Challenges Faced by Iranian Exporters: From Currency Transfer Issues to Visa Acquisition from Qatar

An official from the Iranian Exporters Association announced that among the problems faced by Iranian exporters are the inability to transfer money, for example, from Russia to Iran, and obtaining visas for economic activists from Qatar. Iran still struggles with transferring currency earned from exports. According to the Mehr News Agency, Mostafa Mousavi, a representative of the Iranian Exporters Association, stated in a press conference on Sunday that existing obstacles in the way of exports are increasing exporters' costs. He added that 'currently, remittances must first go to Dubai, then to Malaysia, and from Malaysia to other target countries.' Mousavi also reported the existence of a 'customs clearance mafia in Iraq,' which raises exporters' costs. He pointed out that the cost of establishing a company in Iraq is $15,000, while Turkey provides a $22,000 subsidy to its exporters for opening companies in Iraq, creating intense competition for Iranian exporters. In the same press conference, Mohammad Reza Farshchian, Vice President of the Exporters Association, mentioned that the obstacles to money transfer prevented Iranian exporters from taking advantage of the opportunity created by the ban on the import of dried fruits, fruits, and vegetables from the European Union and Turkey to Russia, thus entering the Russian market. On Sunday, Ebrahim Jamili, CEO of the Exporters Association, called for ensuring strategies in the industrial and agricultural sectors with an export-oriented perspective, stating, 'The government must consider economic diplomacy alongside political diplomacy to improve the country's economic and foreign trade situation.' He advised Iranian exporters to avoid 'negative competition' with each other and to enter target markets in the form of consortiums and large holdings. This official from the Iranian Exporters Association called for creating conditions that would 'facilitate and legalize the entry of money into Iran.' Following the imposition of banking and monetary sanctions by the United States and the European Union four years ago, and the closure of the global SWIFT banking transfer network to Iranian banks, the transfer of currencies earned from oil and goods sales from abroad to the Central Bank has nearly stopped. During this period, the transfer of currencies earned from oil sales to China and India faced years of problems, and this issue has not yet fully normalized. Since the implementation of the Iran nuclear agreement, although the currency transfer issue to Iran has been somewhat alleviated, the relationships between Iranian banks and global banks, especially large European banks, have not yet normalized. A significant current barrier to the connection between Iranian banks and banks outside Iran is, on one hand, the concerns of foreign banks about dealing with Iran due to potential U.S. penalties, and on the other hand, Iran's failure to adhere to the standards of the Financial Action Task Force (FATF) regarding anti-money laundering. The FATF is an international organization established in 1989 with the cooperation of the G7 to combat money laundering and terrorist financing worldwide. In March 2009, the FATF placed Iran on its blacklist alongside Angola, Ecuador, Ethiopia, North Korea, Pakistan, and Turkmenistan, although in early summer 2016, it announced that it would suspend its restrictions against Tehran for one year to assess Iran's progress in implementing the action plan. This suspension was also extended for another year in early summer this year. The implementation of regulations related to the FATF has become controversial in Iran as it restricts Iran's ability to financially support Islamist groups like Hamas and Hezbollah, yet Iranian government officials have stated that assistance to these groups remains a 'red line' for the regime. The unclear status of Iran regarding the FATF continues, while Kamran Nadri, head of the Islamic Banking Group at the Central Bank of Iran's Monetary and Banking Research Institute, stated on May 30 of this year that 'non-compliance with anti-money laundering and terrorist financing regulations has seriously troubled our banks.' Opponents of the nuclear agreement in Iran attribute the ongoing problems in currency and monetary transfers with foreign countries to the 'ineffectiveness of the JCPOA,' while the government denies any connection between these issues and the JCPOA. In October of last year, Abbas Araghchi, Deputy Foreign Minister, stated that the problems of Iranian banks and insurance companies for economic cooperation with foreign countries had been 'resolved' and that there was 'no deadlock' in this regard, but there are problems, some of which relate to foreign countries and some due to the 'outdated' nature of Iranian banks.