Iran’s Trade Promotion Organization has again extended the deadline for exporters to repatriate their forex income to December 21.
This time limit is for businesses that exported in the last fiscal year that ended in March 2020, the TPO website reported. The TPO decision comes after calls by exporters who were unable to meet their forex commitments as agreed.
Central Bank of Iran reports say non-oil exporters had to bring back at least 80% of their earnings in “foreign exchange hawala” and 20% in hard currency.
The regulations were revised later to give export firms extra time to comply and bring back the revenues. In the past exporters had four months to return the earnings starting from the date the export permit was issued by the customs office. However, that time limit was extended for some goods designated by the Industries Ministry.
Due to the US economic blockade export companies find it increasingly difficult to bring money home via banks because foreign financial institutions refuse to handle Iranian transactions fearing US retaliation.
The 2018 US penalties, under the former president Donald Trump, have effectively cut off Tehran’s banking ties to the international community to the extent that the government too cannot transfer its oil export revenue home.
Controversial Proposal
In early October parliament proposed a plan based on which non-oil exporters would have to repatriate their forex earnings within three months after discharging their goods in foreign markets. Failing to comply could result in judicial penalties.
Exporters opposed the proposal to criminalize exporters for not returning their overseas income on time, saying that under the US economic sanctions returning export income is difficult if not impossible.
The legislative plan was driven by efforts to boost non-oil export and increase forex revenue to pay for imports.
As per the plan, if exporters fail to comply as agreed, they face pecuniary penalties twice the value of the exported goods for the first time.
Failure for the second time leads to suspension of commercial cards and possibly jail from six months to one year.
Some Numbers
According to a report published by the Persian-language economic newspaper Donya-e Eqtesad, in three years (April 2018 to March 2021) an estimated 24,000 export companies returned their foreign earnings.
Goods and service export during the period reached €70.2 billion. Export by manufacturers was €52.7 billion, of which they were required to return €45.2 billion. Data show they repatriated €40.1 billion.
Non-manufactures performance was weaker. They took out goods worth €17.5 billion in the three years and were supposed to return €15 billion. What was brought back was much less -- €3.3 billion, or barely 22%.
Back in July, Iran’s Trade Promotion Organization said 363 companies were responsible for the majority of the unreturned overseas export income. “They have not repatriated forex worth €11.1 billion, or about 65% of the total pending amount.”
