After a long-drawn fracas between importers and government authorities, 1,048 cars are to get customs clearance.
According to Financial Tribune’s sister publication Donya-e-Eqtesad, following an agreement between the Industries Ministry and the Islamic Republic of Iran Customs Administration, cars stuck in customs warehouses for months and even years are to be released.
The vehicles are expected to hit the roads soon. But considering the unending twists and turns of bureaucracy in Iran, the process will most probably take months.
Over the past few years, the Iranian government has imposed an on-again, off-again ban on auto imports, which has disrupted businesses and pushed prices to outrageously high levels.
For bringing vehicles into Iran, importers need to place orders with automakers months in advance. The transportation of cars to Iran is also time-consuming. As a result, these vehicles arrived on Iranian shores at a time when a ban was imposed. Therefore, they could not receive customs clearance.
Furthermore, the domestic auto import sector was also marred with numerous scandals, including corruption cases, in which government officials were accused of facilitating the illegal import of luxury vehicles. This further complicated the situation.
Auto imports have been barred in Iran since June 2018. However, cars that were in the middle of getting customs clearance also got stuck when the ban came into effect. Since then, these vehicles remained in the warehouses of customs department, or of other state agencies.
However, despite the ban, illegal car imports continued for months. Following a public outcry over the issue, the Iranian Parliament launched an inquiry into the auto import sector.
Twists and Turns
Following the US decision in May 2018 to pull out of the Iran nuclear deal and reimpose sanctions on Tehran, the rial tanked and its value plunged to unprecedented lows. In the process, foreign currency became a precious commodity and there was not enough of it to continue importing everything, including expensive foreign cars.
In a move aimed at preserving the dwindling currency reserves, the administration of President Hassan Rouhani introduced drastic measures to curb spending. The first to take the hit was the auto import sector. However, illicit imports continued.
An Intelligence Ministry briefing to the Iranian Parliament confirmed “the existence of rent-seeking and other illicit practices” in the lucrative auto import sector.
The parliament later issued a report declaring that between July 2017 and January 2018 when the website, locally known by its Persian acronym Sabtaresh, which provided importers with permits to bring in foreign vehicles was shut down, “6,481 import permits were issued illegally”.
While the parliament put the number of illegally issued online import permits at 6,481, the Iran Auto Importers Association estimates that the real number is closer to 17,000.
In a sector marred with corruption, the biggest losers are customers who have made hefty payments in presale deals with the importers without knowing the date of delivery.
But when the time to take delivery of their cars does arrive, customers will be forced to shell out exorbitant amounts of money at the current inflated forex rate.
