Coronavirus Brings New Headache to Pharmaceutical Importers

Shipping of pharmaceuticals has now turned into a major concern for importers, as transportation of such vulnerable products are mostly carried out by air, says Nasser Riahi, a senior member of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
Riahi noted that the transport of drug products is one of the most difficult tasks in the pharmaceutical supply chain because of the sensitive nature of the product and the complexity of logistics network.
“At present, virtually no flight is being operated from Europe to Iran [following the outbreak of the new coronavirus]. Over-the-road transportation of drugs is not recommended because they must be kept at different temperatures and conditions. Pharmaceutical freights are typically small in weight and size; they can't be transported by a truck. Besides, truck drivers are also grappling with lots of problems in crossing neighboring borders,” he was quoted as saying by ILNA.
The official noted that drug companies have asked one foreign supplier to reserve a regular charter flight to carry the products of all importers once or twice a week, but the cargo must weigh at least 8 to 10 tons.
Asked about Switzerland’s financial channel, known as the Swiss Humanitarian Trade Agreement, Riahi said, “Only one transaction has been carried out via this channel using the remaining resources of the Central Bank of Iran with the Swiss bank, BCP.”
More transactions are conditioned on CBI’s allocation of foreign currency. The key problem with the mechanism of SHTA is that BCP only works with Swiss firms and avoids opening accounts even for other European companies that are Iran’s partners.  
Noting that the country’s medicine reserves were sufficient before the outbreak of coronavirus as well as the New Year holidays, Riahi said, “Over the past couple of months, only 30% of the foreign currency needed for imports of pharmaceuticals have been earmarked. Apparently, the Health Ministry’s quota of foreign currency for the current fiscal [March 2019-20] has ended.”
In late February, the United States and Switzerland formally launched a humanitarian trade channel that was expected to allow companies to trade food, medicine and other critical supplies with Iran.
Reuters said the US Department of the Treasury announced that SHTA was fully operational and noted that it was the first channel established under a US framework announced in October 2019 to facilitate humanitarian trade with Iran.
The channel started pilot operation after a shipment consisting of medicine valued at approximately €2.3 million was sent to Iran.  
SHTA seeks to ensure that Swiss-based exporters and trading companies in the food, pharmaceutical and medical sectors have a secure payment channel with a Swiss bank, through which payments for their exports to Iran are guaranteed.
Food, medicine and other humanitarian supplies are exempt from the sanctions that Washington reimposed on Tehran after US President Donald Trump walked away from a 2015 international deal over Iran’s nuclear program.
But the US measures targeting everything from oil sales to shipping and financial activities have deterred several foreign banks from doing business with Iran, including humanitarian deals.
Last week, however, Sharif Nezam-Mafi, the head of the Iran-Switzerland Chamber of Commerce, said, “The CBI will decide about using the payment channel devised by the Swiss government for sending humanitarian goods to Iran. Using the channel carries some costs for the central bank, as it should allocate resources to the channel to the extent possible."