Is it acceptable to accept a letter of credit in US dollars issued by Iran

I advise you not to take this risk.

There are 2 1 reasons for this: the situation in Iran is unpredictable, and once the sanctions are intensified, it is not a letter of credit or a bank that can restrain you, and you may run out of money.

2 With the intensification of the latest sanctions, the euro that was previously safe (the dollar has not been able to be cleared for a long time) seems to have been in trouble with domestic banks recently, and some domestic clearing banks have asked domestic banks to issue guarantees that the funds under the letter of credit are not designed to be sensitive transactions... Moreover, the China Banking Regulatory Commission has just issued a new document on the business involving Iran, requiring extreme caution, so some domestic banks have recently stopped all business involving Iran, so it is a problem for you to submit documents at that time, and it is estimated that if you ask your issuing bank now, he will not give you a guarantee that he will be able to accept your documents and help you collect money.

The opinion of adding confirmation is basically unrealistic, and no bank (including foreign banks) dares to add confirmation to the Iranian issuing bank, and it is estimated that the Bank of China will not dare. No bank has dared to do Iranian forfaiting, let alone confirmation, for a long time.

PS: It's not as simple as you said that the bank is subject to US sanctions, it is Iran or a country sanctioned by the US, and banks are not allowed to pass through or help liquidate Iranian funds. In the past, the settlement of Iranian dollars was through some European banks linked to Iran, but now it is rare in recent years, and it used to be OK by bypassing the US dollar clearing system, but now it is not possible, and Europe has implemented similar controls.

If your bank opens an account, that is, the bank that accepts this LC agrees to accept this LC, there is basically no problem, and it will definitely not work otherwise. And if there is a problem, your bank will remind you that you may not be able to settle foreign exchange or something, if you have to open it, you need to submit a letter of guarantee with your company's official seal to the bank.

For some foreign banks that are not accepted by mainland banks, they generally use transit banks to transfer and then open them, and more of them are Standard Chartered Bank, ABN AMRO, etc., which must consult the international business department of your bank.

There are many soft terms in letters of credit in the Middle East, which need to be paid more attention to.

Ask the bank's professionals for the safest place.

Generally speaking, the US dollars of the bank are stored in the area where the US dollar is used, mainly in the United States, and the banks of Iran should be no exception, so if you pay the money, you must also go through the ** bank in the United States or your own branch in the United States, then it will definitely be restricted. It should not be a big problem if Iran's bank pays through countries that are not participating in the sanctions, but it is not known where it is paid, so it is better to ask the bank's professionals.

This bank is outside the 500 people. Therefore, it is best to require the other party's letter of credit to have a confirmation clause, which is confirmed by a bank within 500 people.

I've been in this situation as well, but not all banks don't accept Iranian, you go and check with the Bank of China, sometimes they may accept it.

The main reason for the non-acceptance of Iranian letters of credit is the US sanctions against Iran. Since the vast majority of the US dollar bill exchange in the world's international ** is carried out in New York, the United States, due to the US sanctions on Iran, there is no way to exchange such bills, and the middle is separated. Therefore, big banks such as Citigroup, Standard Chartered, and HSBC are reluctant to accept US sanctions for fear of being sanctioned by the United States.

However, small domestic banks have a single channel and are not capable of answering. The Bank of China was the only bank in China that could conduct foreign currency business, and it had more channels to exchange bills through other channels.

Iranian guests, they are more or less connected to companies in the UAE and can issue letters of credit through companies in the UAE, which will allow them to bypass US sanctions.

Due to the economic sanctions imposed by the United States, there are risks associated with Iran** if you pay from Iran. In addition, we have also encountered that when the United States sanctions Iran are serious, there will be an embargo, and there is no way to transport goods directly to Iran, and they have to be transferred from Pakistan and then by land, and the cost has increased a lot, so we must always pay attention to the changes in the international situation and be careful.

Because Iran is a country sanctioned by the United States, international settlements are mostly settled in US dollars, and it is easy to fail to receive payment due to sanctions.

In fact, there is another way, you don't need a letter of credit If you want to know more, please contact me by email.

Iranian customers can evade regulation by issuing certificates from Dubai through underground channels. If the letter of credit that can be issued in Dubai has an Iranian background written on it, then there is naturally a reason for him, and the background of the issuing bank should be fine.

Now that the situation in Iran is deteriorating, the risk of receiving letters of credit issued in Iran is also very high.

In addition to the Bank of Kunlun that can directly receive letters of credit from Iran, it is recommended to pay attention to it.

Judging from the current situation, Dubai is the United Arab Emirates, not a United Nations, the United States, or the European Union sanctioned countries, if it is normal**, Iranian customers should have no risk in opening a letter of credit in Dubai, and the remittance of US dollars and euros will not be frozen. A few points to note are as follows:

1.The applicant (buyer) cannot be a customer sanctioned by the United Nations, the United States, or the European Union, and the name of the customer should not include the word Iran (Iranian);

2.The issuing bank must not be a bank sanctioned by the United Nations, the United States, or the European Union;

3.Commodities should be traded legally.

As for choosing a domestic bank, it is recommended to choose a relatively large bank, and the four major state-owned banks are a good choice.

Hope that helps.

It is best to follow the advice of the Agricultural Bank of China, and the advice of the general big banks is more valuable as a reference when making a letter of credit.

Invest in China credit insurance, you can transfer risks, you can also finance, our company is.

It's best to ask at the bank and be careful.

In the current situation, it is basically inoperable, and caution is advised.

The notification bank can be the Agricultural Bank of China, and the negotiating bank can use CITIC, at least for now.

There is no restriction on Iran's business in China, and the L c clause is not complicated (compared to the certificates issued by some banks in the Middle East or Bangladeshi banks, the letters of credit issued by Iran are much simpler), but many banks will claim that according to Iran's national policy, the documents do not conform to the needs to be released to the applicant, and the applicant will obtain a customs clearance certificate after customs clearance, and the issuing bank will pay with this certificate, which is very risky. But there is an even greater risk that some banks will not be able to send money to the issuing bank, as the recent EU sanctions on Iranian banks have been so severe that many European banks do not accept money sent by Iranian banks or their overseas branches.

Letter of credit (L c) refers to a written document in which the bank (issuing bank) makes payment to a third party (beneficiary) or its designated party on the basis of the prescribed documents in accordance with the requirements and instructions of the applicant or on its own initiative, under the conditions of the terms of the letter of credit. That is, a letter of credit is a written document issued by a bank that commits to payment conditionally.

In international activities, the buyer and the seller may not trust each other, and the buyer is worried that the seller will not deliver the goods according to the contract requirements after the advance payment; The seller is also concerned that the buyer will not pay after shipping the goods or submitting the shipping documents. Therefore, it is necessary for two banks to act as guarantors for both buyers and sellers, collect and submit documents on behalf of them, and replace commercial credit with bank credit. The instrument used by banks in this activity is the letter of credit.

I'm here in Wenzhou, and I used to do an LC in Iran, but the Bank of China didn't do it. It may be that the issuing bank is not good, and it is recommended to find an issuing bank that is not an Iranian bank, and China will accept it.

But the L C over there is very complicated.