Date: 16/05/2024


Q 376: We would like to know about the financial aspect of export to Iran. It is difficult to receive money from Iran. Financial transaction with Iran is not easy. Banks are not able to help. Could you guide us?  
A: 1. Yes, it is a problem to trade with Iran.
2. Iran is under sanction imposed by the US. Use of dollar for payment against export to Iran is not workable due to sanction. Due to political reasons, the US has put an embargo/boycotted Iran.
3. We have already written in this column about export to Iran and the problems associated with that.
4. We are once again giving you some of the points from the past answers, which will satisfy your query.
5. The Government of India has permitted export of goods to Iran against Indian rupees.
6. Certain rules and regulations are framed for Iran trade, more particularly for banking purpose.
7. Export proceeds realised in Indian rupees against exports to Iran are permitted to avail exports benefits/incentives under the Foreign Trade Policy 23.
8. UCO Bank was active in doing business with Iran through rupee payment mechanism.
9. IDBI Bank was also handling Iran business in INR.
10. IDBI Bank does not deal with Iranian bank which is under secondary sanctions.
11. Indian exporters should follow the general guidelines as prescribed by the bank:
Sr. No.
a Port of loading should be an Indian port.
b. Transhipment is not permitted.
c Export transaction should be only for specific sectors. Pharma, food, etc.
d.  Export should not be to any entities figuring in the US OFAC SDN List. 
e. Non-sanctioned goods of Indian origin are permissible for export to Iran.
Goods to be exported should not be under US OFAC sanctions, or end use of the product should not be in sanctioned sector of Iran.
g. Re-export of goods permissible under US OFAC guidelines only on humanitarian grounds. These goods should be in conformity with Foreign Trade Policy of India / RBI guidelines.
h. Goods should not be in SCOMET list (Special Chemicals, Organisms, Materials, and Equipment & Technologies) of DGFT; or if goods are in SCOMET list (of DGFT), it should have certification from appropriate agency (as per Foreign Trade Policy).
i. Goods to be exported should be NOT OF DUAL USE (A dual use item is a commodity that has both commercial and military or nuclear proliferation application.).
j. Invoicing and all related export documents should be in INR only.
k. No merchanting trade is permitted under Rupee Payment Mechanism. 
l. Apart from Foreign Trade Policy of India, OFAC guidelines are also to be complied with reference to sanctions on Iran.
12. The problem is more serious if the currency of transaction is USD. Most banks are not willing to handle, directly or indirectly, documents related to Iran.
13. We understand that the rupee fund is not available with UCO/IDBI banks for payment regarding shipment to Iran; the activities have slowed down substantially.
Q 377: Cylinders for gases manufactured in China are not being approved by the Indian authorities. Is there any specific rule on the same? 
A: 1. We understand that you wish to import gas cylinders from China.
2. Your import item is covered under 7311 – containers for compressed or of liquefied gas, iron or steel.
3. Import of this item is subject to quality control orders issued by concerned Ministry/Department of the Government of India.
4. Bureau of Indian Standards (BIS) is an implementing authority for quality of the goods.
5. The import product must confirm to Indian standards for that particular product.
6. Following are some of the applicable standards for gas cylinders.
* IS 14899
* IS 3196
* IS 7142
* IS 7285
* IS 7312
7. The supplier from China is required a license under BIS certification scheme for foreign manufacturers.
8. Your supplier has to get registered by following the procedure prescribed under the scheme.
9. Each country decides its own rules and regulations for import of different products.
10. Cylinder for gas is a sensitive product. 
11. Gas cylinders require strict safety norms.
12. You can also ascertain the need of approval by the Chief Controller of Explosives, Nagpur, before it is put to the use after they are imported.
13. Your import should match with Compulsory Compliance prescribed for import of gas cylinders.
14. As the registration of foreign supplier is mandatory, the same is to be followed.
15. We understand that your present supplier is not an approved one.
16. Under the circumstances, you have to identify an alternate supplier from that country and / or another supplier from other countries.