Personal Remittances – More regulated than you may think

Chalk this one up as one more sign of how granular U.S. sanctions on Iran still are and why you should still be careful.

We recently helped a client obtain an OFAC license to close out a bank account in Iran and transfer the funds to the United States.  Most of the money was sent from a third country exchanger (sarafi), but a very small amount (under $10,000) was remaining.  This week, an email came asking if the client could have her brother hand carry the cash to the United States, rather than having to send it over via a third country exchange.  This is something that probably happens daily, if not hourly.

Personal, non-commercial remittances (or so-called “family remittances”) are among some of the lesser regulated funds transfers between the US and Iran. Individuals can send funds for their family (like gifts) in unlimited amounts, between both countries, provided the transfer meets all applicable provisions of US law, for example, no sanctioned banks, or ensuring the funds come into the US through a third country (like the UAE or China).  US persons can even hand carry cash remittances for family in Iran, such as someone from the US taking $1,000 for their mother there.

But it effectively stops there. You can hand carry cash to Iran, so long as you’re not carrying it on behalf of somebody else. Meaning, your sister can’t give you $1,000 to take with you to Iran to give to your mother.  The converse (hand carrying for someone else from Iran to the US) is also true – it’s not allowed.  This was confirmed to us via email by the OFAC Licensing Officer responsible for the above-mentioned license. Such transfer needs to be specified in the license request filed with OFAC and therefore such authorization will be provided in any subsequent license based on that request.  And that’s just one example of many.

You could say that current sanctions mean that dealing with Iran, even on a personal level, is kind of like walking along 6 inches away from an electrical fence. You’re OK so long as you don’t touch the fence, but if you do, a whole set of problems can arise. Oftentimes, transactions that are otherwise legal are effectively tainted by our own clients (before they retain us!), meaning a transfer, if done right from the beginning, may not need an OFAC license, but the client (or a relative or agent in Iran) may wind up doing something along the way that makes the client need to obtain a license.  Therefore, seeking compliance is not something you do in the final phase but from the get-go..

This example highlights that individuals seeking to engage in a financial transaction should consider all aspects of the transaction and should plan beforehand. The premise of legalities and authorizations in OFAC is based not just on the underlying transaction (meaning what you did to get that money, like sell a property or receive a gift) but also how that transaction was carried out (who the parties involved are, what banks are involved, how the money gets to you in the US, etc.). Lesson learned – don’t assume and take things for granted. At the end of the day, you’re still talking about Iran, which remains (contrary to the belief of some) subject to the most robust sanctions regime in US history.

Cleaning up is far more difficult and costly than preventing.

An international trade compliance (sanctions, export controls, customs, anti-corruption) and defense lawyer.

Posted in Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Akrivis Law Group, PLLC
Washington, DC

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 109 other subscribers

This website aims to provide notes and commentary on international legal, business, and political developments in economic and other sanctions. It is intended solely for information and entertainment purposes and should in no way be construed as legal advice. Laws, regulations, and policies change from time to time so some information on older posts can very easily be dated. If you have any questions or are unclear on any of the subject matters addressed or discussed on this site, please consult a licensed legal professional. Views presented in the comments and outside links do not necessarily reflect those of the website author. All external links on this website to articles and documents are external and provided for informational purposes only. They have no relation to the author of this website unless specified otherwise.

This website is independent of Akrivis Law Group, PLLC and any statements of opinion posted on this website are therefore not to be considered positions of Akrivis Law Group, PLLC.

Quotations and linkages do not imply any type of endorsement.

Copyright 2023 Farhad R. Alavi.

All rights reserved.

US Sanctions Law Blog

%d bloggers like this: