Downtrend in Smuggling Over Past Three Years

Smuggling has had a downtrend since Hassan Rouhani took office as Iran’s president in August 2013.

The total value of smuggled goods during the three fiscal years March 2013-16 stood at $25 billion, $19.8 billion and $15 billion respectively. “Last year (March 2016-17), the figure shrank to $12-13 billion, indicating a substantial decrease of 50% compared to the year Rouhani came to power,” Qasem Khorshidi, the spokesman of the Headquarters to Combat Smuggling of Goods and Foreign Exchange, was quoted as saying by IRNA.

“In 2013, less than 1% of all the goods smuggled into Iran were confiscated. The rate stood at 32% last year, during which 146 trillion rials ($3.869 billion) worth of contraband were seized.”

Notably, the seizure of narcotics grew by 711% during the fiscal March 2014-15 compared to the year before.

Installing customs and border protection equipment, and using X-ray trucks and sniffer dogs were among the measures taken to combat smuggling.

The High Council of Free Zones has given the nod to the Islamic Republic of Iran Customs Administration to exercise customs controls and collect duties at the ports of entry of free trade zones.

Customs and border protection equipment were earlier installed only at FTZs’ ports of exit, according to IRICA’s website.

The customs administration has also received a new truck outfitted with X-ray equipment it had ordered for Shahid Rajaei Port, enabling the speedy scanning of imported containers. Domestic resources were committed for the purchase, the report said.

There are now 12 X-ray trucks in Iran’s customs terminals, three of which (including the new one) operate at Shahid Rajaee–Iran’s most active port in the southern province of Hormozgan.

  Rise in Customs Revenues Despite Drop in Imports, Tariffs

In the fiscal March 2013-14, Iran’s imports stood at $63 billion, earning the Islamic Republic of Iran Customs Administration about 75 trillion rials ($1.9 billion) in revenues.

The total volume of imports fell to $43.6 billion last year, showing a 40% decrease. Moreover, the average tariff rate declined from 27% to 19.2%. Nonetheless, IRICA earned 180 trillion rials ($4.7 billion) in revenues last year, thanks to the implementation of an integrated customs system.

“This figure, showing a 150% rise in revenues, is exceptional in the history of IRICA,” Khorshidi added.

Nonetheless, smuggling remains one of the main issues overshadowing Iran’s economy.

According to the Headquarters to Combat Smuggling of Goods and Foreign Exchange, per capita consumption of contraband in Iran stood at $197 last year.

Contraband comprises 83% of the mobile phone market, 47% of toy market, 27% of the apparel market and 21% of the household appliances market.

According to Abdolmajid Negaresh-Nejad, an official with the headquarters, every $1 billion worth of contraband smuggled into the country destroy 100,000 jobs.