Non-oil export companies have not repatriated €17.5 billion to the country over two years from May 2018 to June 2020, according to the head of the commercial services department of Iran's Trade Promotion Organization.
"Total export was €60.4 billion of which €54.6 billion should have been repatriated," Ehasan Qamari told IRNA.
Qamari compartmentalized exporters as “manufacturing companies and non-manufacturing traders”, saying that the former exported goods worth €45.2 billion in the two years, of which €40.9 billion was among their repatriation commitment but €34.2 billion was brought back.
Non-manufacturing exporters account for most of the unreturned earnings. "Goods exported by this group were valued at €15.2 billion. They had a commitment to bring back €13.6 billion but only €2.9 billion was returned," the official said.
It was not clear why the companies had failed to meet their financial commitments. In the two years 21,692 firms, including 6,832 manufacturers and 14,860 trading companies, were involved in export.
Of the total €17.5 billion in unfulfilled commitments, Qamari said, €1.7 billon pertains to “export procedures under temporary entry.”
Temporary entry is a customs procedure under which goods can be brought into the country conditionally exempt (totally or partially) from import duties and taxes.
Such goods must be imported for a specific purpose only for re-export within a specific period and without having undergone any change. The goods may be exported temporarily for final manufacturing, processing or repairs and be reimported.
According to Qamari, border dwellers account for €1.4 billion of the unreturned export earnings and the TPO is preparing ways and means to resolve the problem.
CBI Tightens Rules
Earlier the Central Bank of Iran estimated unreturned export earnings at €25 billion. Shortage of currency reserves due to the US sanctions and pandemic obliged the CBI to tighten export repatriation rules last March.
Due to the US economic siege many companies are finding it increasingly difficult to bring their money home via banks because most international banks and financial institutions, fearing Washington’s wrath refuse to handle Iranian transactions.
Donald Trump, the beleaguered US president, announced penalties in 2018 that totally cut off Tehran’s financial ties with the world to the extent that the government also cannot transfer oil export revenue home.
As per rules announced in July by the CBI, non-oil exporters must bring back at least 80% of their earnings in “foreign exchange hawala” and sell it via the secondary foreign exchange market, known as Nima. They can also sell a maximum 20% in hard currency to authorized exchange shops.
Nima is an online platform affiliated to the CBI where exporters sell their overseas currency income and companies buy for import.
Qamari confirmed that repatriations picked in the past two months after the government tweaked rules. Last October the Rouhani administration reformed rules for bringing back non-oil export revenues that long had been a bone of contention.
Approved by the ‘Headquarters for Economic Coordination of the Cabinet’, exporters were given permission to use their earnings to import goods, raw materials and machinery either for their own needs or a third party under procedures known as “import in exchange for export” or “currency barter between exporters and importers”.
As per the rules, exporters are obliged to return their earnings within four months starting from the date the export permit is issued by the customs authorities.
Exporters who do not comply may face penalties, including, but not limited to, suspension of commercial cards, closure of bank accounts, travel bans and impounding of goods.
