Iranians Elude Sanctions
Today's Wall Street Journal contains a good overview of the effect of U.S. and multilateral economic sanctions on Iran, the methods used by Iranian business to elude such sanctions and the resulting problems that are created. The article notes that the sanctions:
. . . are rerouting money flows between Iranian businesses and their overseas customers and suppliers, pushing them outside of the regulated global banking system. Businesses are using cash, informal money transfers and banks that aren't monitored by international authorities. That has some economists, banking experts and businessmen wondering whether sanctions are making it more difficult to trace money laundering, drug smuggling and terror financing in the region.Specifically, the article notes that Iranian businesses are looking to "the United Arab Emirates and other Persian Gulf commercial hubs for business partners to help them skirt the sanctions." The article notes that imports into Iran from the United Arab Emirates increased 20% in 2006 and 25% in 2007.
Because of sanctions on Iranian banks, the article indicates that in order to "move money in and out of Iran, businesses increasingly are turning to informal money transfers and cash couriers", which are difficult to track. The article contains a good discussion and flowchart showing how middlemen and hawala money transfer services are used to transfer money to and from Iran.
Labels: Sanctions; Iran