The trade situation between Thailand and Iran.

As of mid-2024, there are no direct trade sanctions imposed by Thailand against Iran, or vice versa. However, Thailand's trade with Iran is indirectly affected by U.S. sanctions and international restrictions related to Iran's nuclear program. Here’s a breakdown of the situation:

1. Impact of U.S. & International Sanctions on Thailand-Iran Trade

• Financial Restrictions: Thai banks may avoid transactions with Iranian counterparts due to U.S. secondary sanctions (e.g., restrictions on using the SWIFT system).

• Limited Trade in Sensitive Goods: Thailand restricts exports of dual-use items (e.g., chemicals, advanced machinery) that could be linked to Iran's nuclear/military programs.

• Oil Trade: Thailand previously imported Iranian oil but stopped after U.S. sanctions were reinstated in 2018.

2. Current Thailand-Iran Trade Relations

• Permitted Trade: Thailand still exports rice, rubber, automotive parts, and consumer goods to Iran, often through barter systems or third-party intermediaries.

• Key Imports from Iran: Petrochemicals, fruits (e.g., pistachios), and carpets (though volumes are reduced due to sanctions).

3. Workarounds Used by Traders

• Barter Trade: Some exchanges (e.g., Thai rice for Iranian oil or goods) avoid direct financial transactions.

• Third-Country Payments: Transactions routed through intermediaries in countries like Turkey or Oman.

4. Recent Developments

• JCPOA Uncertainty: If the Iran nuclear deal (JCPOA) is revived, sanctions could ease, boosting trade. For now, caution remains.

• Thailand’s Neutral Stance: Thailand maintains diplomatic ties with Iran but complies with UN/U.S. sanctions.

Conclusion

While no bilateral sanctions exist, U.S. and international restrictions create challenges. Trade continues in non-sensitive sectors, often using alternative payment methods. Businesses should monitor sanctions updates to avoid compliance risks

Here’s a detailed guide on how Thailand-Iran trade operates under sanctions, including key procedures, risks, and workarounds for exporters and importers

1. Permitted vs. Restricted Trade Items

✅ Allowed Exports (Thailand → Iran)

• Food Products: Rice (especially parboiled), canned tuna, frozen chicken (halal-certified).

• Consumer Goods: Textiles, cosmetics, rubber products (e.g., gloves), furniture.

• Automotive Parts: Spare parts for vehicles (but not advanced tech with military applications).

🚫 Restricted/Risky Exports

• Dual-Use Goods: Chemicals, high-precision machinery, electronics (risk of sanctions violations).

• Oil/Gas Technology: Equipment for Iran’s energy sector (strictly prohibited under U.S. sanctions).

Iranian Exports to Thailand (Limited but Possible)

• Petrochemicals: If payment bypasses U.S.-controlled systems.

• Agricultural Products: Pistachios, saffron, dates (often via third countries like Turkey).

2. Payment Methods (Overcoming Banking Barriers)

Since direct bank transfers are nearly impossible due to U.S. sanctions, traders use:

A. Barter Trade

• Example: Thai rice exchanged for Iranian petrochemicals or carpets.

• Challenges: Requires trusted intermediaries; hard to balance value.

B. Third-Country Intermediaries

• Hubs: Turkey, Oman, UAE, Malaysia (process payments in euros/yen/local currencies).

• Process:

  • Iranian buyer pays intermediary in Dubai.

  • Intermediary transfers funds to Thai seller.

C. Cryptocurrencies (Risky but Growing)

• Some traders use USDT (Tether) or Bitcoin, but legality is unclear.

D. Open Accounts in Non-Sanctioned Banks

• Few regional banks (e.g., in China, Kazakhstan) may handle Iran-related transactions.

3. Shipping & Logistics

• Preferred Routes: Ship via Oman (Sohar Port) or UAE (Jebel Ali), then truck to Iran.

Documentation: Avoid mentioning Iran in bills of lading; use codes like "Persian Gulf port."

Insurance: European insurers often refuse coverage; use Asian providers (e.g., Thai Reinsurance).

4. Compliance Risks & Penalties

• U.S. Secondary Sanctions: Non-U.S. entities can be penalized for violating Iran sanctions (e.g., losing USD access).

• Due Diligence Required:

  • Screen Iranian partners against OFAC’s SDN List.

  • Avoid deals with IRGC-linked companies (high risk).

5. Case Study: Thai Rice Exports to Iran

Process:

• Thai seller agrees to price in euros/baht.

• Iranian buyer transfers funds via an Oman-based intermediary.

• Rice shipped to UAE, then re-exported to Iran.

Success Factors:

• Using halal certification to appeal to Iranian buyers.

• Small shipments to avoid scrutiny.

6. Future Outlook

• If JCPOA Revived: Banking channels may reopen, boosting trade.

• Current Workarounds: Likely to continue until sanctions ease.

Key Contacts for Thai Exporters

• Thai Ministry of Commerce: Iran Desk (email) for latest updates.

• Iran-Thailand Chamber of Commerce: Facilitates matchmaking (based in Tehran).

Pro Tip: Consult a sanctions compliance lawyer before deals. Many Thai firms use Dubai-based agents to navigate restrictions.