Domestic Economy

President Calls for Effective Anti-Smuggling Measures

President Calls for Effective Anti-Smuggling MeasuresPresident Calls for Effective Anti-Smuggling Measures

President Hassan Rouhani has issued two executive orders, calling upon the relevant government bodies to help curb smuggling which he described as a “devastating threat to consumer rights and domestic production.”  

He made the remarks in a session with the Resistance Economy Coordination Headquarters, which was attended by high ranking government officials, IRNA reported on Sunday.

The president urged the ministry of industry, mine and trade to take necessary measures to increase transparency and accountability in business activities across the country.

He also urged Iran’s Central Task Force to Combat the Smuggling of Commodities and Currency to control all seaports and docks to prevent unauthorized bodies from interfering with import activities.

According to IRNA, Iran’s Customs Administration's attempts to ease unnecessary regulations and facilitate electronic processing of data for customs procedures helped reduce trafficking and increase customs revenues over the past year.

> A Disconcerting Issue

For years, smuggling has been a disconcerting issue in Iran. Before 2008, authorities reported smuggled goods to Iran to be worth about $6 billion. After only one year, the official figure was put at $18 billion. Many economic experts called this figure a disaster, stressing the need to fight the high rate of smuggling. Responsible authorities at the time promised that "immediate measures would be taken without leniency."

More than five years since the "immediate" call for action against smuggling, authorities announced on January 11 that smuggling rates currently stand around $21-$25 billion in Iran, according to ILNA.

The obsolete tariff system in recent years has not only created problems for domestic manufacturers, but also pushed Iranians to purchase similar foreign products at lower prices. One of the main reasons behind the rising smuggling in recent years is said to be the policies implemented during Mahmoud Ahmadinejad's two consecutive terms (2005-2013) purportedly

in support of domestic manufacturers via limiting imports.

For example, tariffs on cell phone imports were increased suddenly, while the then minister of industry, Alireza Tahmasbi said: "Domestic manufacturing of cell phones needs to start to enable the country to compete with the world's largest brands." The move led to a hike in cell phone prices and flooded the market with smuggled phones.

The same scenario occurred in the audiovisual industry, turning border towns into smuggling gateways. Between 2007 and 2010, the town of Baneh in the western Kurdistan Province became Iran's smuggling capital. Apart from the illegal traders, people in general started traveling there to purchase goods, mainly electronics and home appliances. Soon, the market expanded to include other products such as cosmetics, and smuggled goods from Baneh found their way into other markets across the country.

Exponential growth in smuggling was also reported in the southern, northern, and eastern border regions.

"Corrections must start with governments. Imprudent policies are the main reason behind increased smuggling in and out of the country. Other measures to curb smuggling can only work effectively after the government policies are corrected. Meanwhile, the issue of smuggling goods is once more at the center of attention, demanding a fundamental revision in policies," says university lecturer, Mansour Kamalnia.

Border markets play a significant role in illegal imports and exports. With an area of 1,873,959 square kilometers, Iran needs stricter border controls to fight smuggling.