Iranians Scramble to Move Money Abroad Amid Sanctions Siege

Tehran, Iran – Decades of international sanctions have severely restricted Iran's access to the global financial system, making cross-border transactions difficult for both individuals and businesses. The sanctions have intensified amid the current war between the US-Israel and Iran.

Unable to rely on ordinary banks for international transactions, many Iranians have turned to alternative channels to pay for goods and services abroad. Each channel helps overcome part of the restrictions, but each comes with costs and risks, and rarely achieves the safety, reliability and efficiency of a normally functioning international banking system.

Money-exchange networks and intermediary companies

One alternative financial channel relies on cross-border money-exchange networks — an informal system that connects those who need local currency in Iran with those who need foreign currency abroad. By balancing these two opposing demands, transactions can be settled without money necessarily moving directly between Iranian and foreign bank accounts.

Other similar methods exist. Intermediary companies offer services similar to money changers: customers pay in local currency inside Iran, while a company or partner abroad arranges payment to a foreign supplier in a freely convertible currency, using funds held overseas.

Using money changers or intermediary companies can help fill the gap left by lack of access to international banks, but both typically entail additional fees, exchange-rate costs, delays and greater complexity.

Some Iranians do not deal with companies at all, instead relying on private arrangements with individuals, including strangers, to move money across borders. These arrangements can be a practical solution when official channels are unavailable, but they depend heavily on trust rather than enforceable guarantees.

"The transaction requires strangers to trust each other to carry out a deal without any legal documents or evidence," said Reza, an Iranian IT manager in Germany who did not want to give his full name. "It relies entirely on trust, and either side can pull out at any time, leaving the other to lose money."

According to Iran trade expert Ashkan Bahrami, the methods used — whether through companies or individuals — are all informal and not the safest option. "We have to use informal exchange and money-transfer systems for international trade, which brings risks such as lost money, fraud and high transfer costs," he said.

These networks are also vulnerable to geopolitical shocks. Some networks operating through Gulf countries have been disrupted by the fighting, adding further uncertainty for businesses and individuals who depend on them.

The cryptocurrency route

Cryptocurrency once opened another path, allowing users to move assets without relying on ordinary banks. But even this digital asset does not offer a fully reliable escape from sanctions. Earlier this year, the US Treasury's Office of Foreign Assets Control (OFAC) sanctioned several major Iranian crypto exchanges, including Nobitex, Wallex, Bitpin and Ramzinex.

Alireza Yaghoubi, board chairman of the Iran FinTech Association, warned that crypto transactions can be traced, "and very bad things can happen, such as sanctions being imposed on many Iranian wallets, whether they belong to individuals, the Central Bank or other organisations".

The possibility of sanctions, combined with periodic internet disruptions, makes cryptocurrency a precarious option.

Import delays

For businesses importing physical goods, the challenge is not only payment. Wartime disruptions and restrictions, especially after the US naval blockade targeting Iran, have complicated shipping, lengthened delivery times and increased uncertainty over when goods will arrive.

Arghavan Ghazanfari, chief executive of Aron Trading Group, described the level of disruption importers face when using China's Shanghai port — a major hub for goods shipped to Iran.

"Shipping time used to be 26 days. But now that it stretches to 102 or even 120 days, customers are forced to reconsider importing," Ghazanfari said. "Unfortunately, the main problem now is that our supply routes are gradually being cut off."

And even when Iranians find a way to pay abroad — and accept the wait to receive goods — there is another problem: whether they can still afford what they want to buy.

The Iranian rial's steady depreciation has sharply eroded purchasing power. Against the US dollar, the Iranian currency has lost more than 10% of its value in the past month, more than 55% over the past year and nearly 90% over the past five years.

And there is little sign the pressure will ease soon.

Faced with the prospect of further escalation and an uncertain economic outlook, the question for many Iranians is not only how to move money across borders, but how long they can keep coping within an ever-tightening financial system — and at what cost.