Iran Export Federation in a letter to the Majlis voiced concern over a proposal by lawmakers to criminalize exporters for not returning their overseas income on time.
Last week MPs proposed a plan based on which non-oil exporters must repatriate their export earnings within three months after discharging their goods in foreign markets. Failing to do so carries judicial punishment if the proposal becomes law.
In the letter the IEF chief Mohammad Lahouti said under the US economic sanctions returning export income is difficult if not impossible.
“Given the complications of the economic sanctions, repatriating currency within three months would not be possible and will only cause judicial cases to pile up,” the letter published by the IRIB website noted.
If such a move becomes operational, he wrote, using rented and single use commercial cards will gain traction.
Warning about its repercussions for foreign trade, Lahouti said “the Majlis plan will ultimately backfire and its purported goals will not be realized.”
The legislative plan is driven by efforts to boost non-oil export and increase forex revenue to pay for imports.
As per the plan, if exporters fail to return the income within the agreed timeline, they will face pecuniary penalties twice the value of exported goods for the first time.
Failure for the second time will lead to suspension of commercial cards and possibly jail sentences from six months to one year.
The Majlis measure has also been criticized by senior government officials and private enterprise. Head of the Trade Promotion Organization of Iran Alireza Payman-Pak on Sunday said he had expressed his opposition to the relevant committees in the parliament
“The plan is likely to create problems for exporters and is at odds with export promotion policies,” he was quoted as saying by IRNA.
Likewise, head of the Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafiei said the plan will undermine the key export sector.
“This is not congruent with the general export promotion policies announced earlier in the month by the government,” ICCIMA quoted him as saying.
In the letter, Lahouti pointed to a plan of action announced by the vice president for economic affairs, saying that the export development package will allay Majlis concerns about returning export income.
As per the package, the Industries Ministry is obliged to “identify local banks and reliable exchange bureaus in neighboring and friendly countries, and set up safe financial channels to transfer money”.
The plan includes proposals for promoting barter of crude oil and gas with “high priority goods”. To encourage export, the Economy Ministry is obliged to refund value added tax of non-oil exporters “unconditionally” within one month after export.
It also calls for improving trade with a special focus on neighbors and facilitate import of basic goods.
Due to the US restrictions, many export companies are finding it increasingly difficult to bring money home via banks because most foreign financial institutions refuse to handle Iranian transactions fearing US retaliation.
The US economic blockade has cut off Tehran’s banking ties to the international banking network to the extent that the government too cannot transfer its oil export revenue home.
