The Trade Promotion Organization of Iran is temporarily easing forex repatriation for traders exporting to Qatar, the TPO chief said.
“It has been decided to let companies selling to Qatar to repatriate 70% of their proceeds from August 23 to Nov. 21” Alireza Payman-Pak was quoted as saying by the TPO website.
The facility is available only for five categories of goods, namely food, fresh fruits, dried fruits, carpets and handicraft.
Exporters can return their income within six months after the date of export.
The incentives are in line with policy to expand trade with the Persian Gulf Arab state which Tehran has had cordial relations.
“The move also is to [help] encourage export to the country in the run-up to World Cup 2022 which will be hosted by Qatar.”
The 2022 FIFA World Cup is the 22nd edition of the World Cup competition, to be contested by national teams of member associations of FIFA from Nov. 21 to Dec. 18.
The two neighbors have maintained friendly political relations in recent years and strived to expand economic ties. Bilateral trade in the last Iranian year (March 2021-22) was $150 million.
Iran exported $140 million worth of goods to Qatar, including tomatoes, watermelons, iron and steel products, tar and oil, Portland cement, shrimps and floorings, Fars News Agency reported.
Imports of heavy machinery, excavators, airplane spare parts, natural rubber and pulp amounted to $10 million.
Striving to find alternative source of income to substitute lost oil revenues, the Tehran government is trying to promote non-oil export and says is committed to removing hurdles.
Rules related to the repatriation of export earnings became tougher after the United Sates imposed new sanctions in the spring of 2018 unleashing a severe shortage of foreign currency as oil exports declined cutting off a large part of currency revenue.
Soon after the government obliged exporters to sell their export earnings via a secondary market at an exchange rate that was below the higher open market.
In this system, locally known by the Persian acronym Nima, importers declare their currency needs, exporters register their currency proceeds and banks and authorized moneychangers are dealers.
Non-oil exporters have to bring back a segment of their earnings in foreign exchange hawala and sell it via Nima. They also can sell the currency to authorized exchange shops.
Most small and medium sized export companies meet their export forex repatriation commitment via the “import in lieu for export” mechanism announced in October 2020 as part of efforts to reform rules and ease the cumbersome process in bringing back non-oil export revenue.
Export firms can also use part of their earnings to import goods, raw material and machinery either for their own needs or for a third party.
