Friday, 16 March 2012

No money transfers in and out of Iran - How does this affect International Marketing?

SWIFT the organisation in charge of transferring money between banks in different countries, has announced that from Saturday 17 March it will not be making money transfers to and from banks in Iran. SWIFT (Society for Worldwide Interbank Financial Telecommunication) said that the ban reflects international sanctions imposed on Iran. As the majority of international bank transfers are undertaken by SWIFT this is going to make business difficult for anybody (outside Iran) who wants to sell to or buy from companies based in Iran. This is because payment for goods would normally be through an interbank transfer. How does this affect international marketing?

The answer depends on who is involved and what is being traded. For example many countries have said that in line with UN sanctions they will not buy oil from Iran. China and India still want to buy oil from Iran and as Iran is willing to accept payment in gold, they may be able to do so. Although countries may be able to transact in gold, payment in gold is not a practical solution for businesses, especially if they are based outside Iran.

SWIFT's ban demonstrates the importance of carrying out a full PEST analysis ( before starting international marketing activities. The international marketing environment needs to be carefully examined to minimse wasted resources.Obviously not all events can be predicted but if you can deal with the ones you are aware of you'll have a good start.

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