Importers of petrochemicals from Iran have resorted to using bank cheques, direct remittance to accounts, escrow accounts and "hawala" transactions used in the Indian subcontinent, to get past the problem of banks delaying or declining to honour letters of credit from Iran, as per Platts. Petrochemicals from Iran are preferred as they are cheaper.
An escrow account requires the involvement of a third party trusted both by the importer and the exporter. Here, money is put into the account of the third party by the importer of petrochemicals from Iran, and is released to the seller when the consignment reaches him. "Hawala" transactions, popular in India and Pakistan for remitting money through unofficial channels, on the other hand, involves paying the amount to be remitted to an agent in the sender's country. Later, the agent's appointee in the country where the money is to be remitted makes the end-payment. Dubai has a huge population of Iranian expatriates and therefore "hawala" transactions are considered easy.
19-Oct-10 
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