Oct 292014

Federal Reserve Bank of New YorkQuestion:

The Federal Reserve Bank of New York, is trying to send me money through a wire transfer to my bank account and they are asking me for my banks swift code. I called my bank and they said they don’t have a swift code. The federal Reserve bank in New York, told me that I have to register the code, and to do that, I had to pay $427. I need to know if this is right.

By the way, I am in Texas. I need a response to this message ASAP please. Thank you



Dear Cheryl, thanks for writing to us.

You said the Federal Bank wants to send you money and they want a SWIFT code for your bank. Do they want you to pay them $427 for registering a SWIFT code? A bank individually registers for it, it is not upon their customers to do it. If they don’t have a SWIFT code, they are not a member of SWIFT community.

If you haven’t read our article on SWIFT codes, I urge you to read it here. SWIFT is used i case of international transfers, and for local transfers within the US, you have the Fedwire network. I doubt that the Federal Bank of New York would request for a SWIFT code for sending money to Texas. They could use a local framework instead.

I advise you to be careful because scams in the name of Federal Bank are quite common these days. You could read this on the bank’s website. I’d like to quote a statement from a link on that page:

The Federal Reserve Bank of New York and other Federal Reserve Banks will never contact the public via unsolicited phone calls or e-mails asking for money or any other type of personal information. Moreover, the Federal Reserve Bank of New York and other Federal Reserve Banks will never contact the public regarding the issuance of a wire transfer.

Having said all this, even if this was a genuine case, then remember that you are not supposed to pay for registering a bank as a member of the SWIFT network. Whoever is requesting money from you maybe trying to scam you, so be alert.

May 032014

Ahmad Wrote:

Pls i wanna know how i can send money from Iran to the state (USA)? Pls, it is urgent i wanna send it to my sick family.

Answered by Mohammed Waseem:

No bank in Iran can deal with any entity in the US for the fact that they have been listed by the US under Specially Designated Nationals (SDN) of the Office of Foreign Assets Control (OFAC), which is the biggest of the black lists maintained by the US.

Iranian Riyal Bill

An Iranian Riyal Bill

In other words, any funds coming into the US, in which an Iranian institution has some financial interest, is blocked. This essentially means the freezing of the money until the block is removed. But some of the banks can be used for personal remittances; these banks have been licensed by the OFAC to carry out some transactions. It is very difficult to obtain such licenses; in fact, any person wanting to even close an account is required to obtain authorization of OFAC.

The hawala system was in place for transferring money to and from Iran, but even that was stopped later. Hawala is when a third country bank is involved in the transfer process. Some people are using the traditional method of carrying physical cash to and from Iran due to the problems with the sanctions. However, non-commercial transfers are allowed through some banks like I mentioned, but I could not find the list of banks included. You could ask your local bank if they make such transfers.

Most leading money transfer services including Western Union, PayPal and MoneyGram do not operate in Iran. I read that companies including ZTransfer and Rialex offered the service to send funds from Iran to the US, but they seem to have closed down their websites for some reason. I suppose there is no way to transfer money to the US from Iran, except if local banks are authorized by OFAC to make such a transfer.