IRICA Wakes Up to Cellphone Smuggling

Incoming passengers are not allowed to bring more than one cellphone and will have to pay 18% of the value of the phone as tax, the Islamic Republic of Iran Customs Administration announced over the weekend.

 “The move is aimed at curbing suitcase trade of cellphones,” IRICA public relations manager Saeed Ahmadkhani told Financial Tribune in a telephone interview.

Since Oct. 20 and with the introduction of national Registry Scheme, all mobile phones are required to be registered on an online database established jointly by IRICA, CRA and the Telecoms Ministry. All the active devices in the local mobile network (regardless of being imported legally or smuggled) have been registered on the database.

Suitcase trade refers to small-scale exports and imports of goods carried out by passengers across borders in their luggage that are later sold. Prior to the introduction of the new regulation, many travelers returning home from overseas trips packed their suitcases with several handsets.

According to Ahmadkhani, “Henceforth travelers will have to pay 18% ‘import tax and register their devices with the customs during entry.”

“Unless the handsets are registered within the system, they will be blocked by the Communications Regulatory Authority, and local operators will be barred from offering services to such mobile phones,” he added.

On arrival, the mobile phones IMEI code should be registered on the online database. To register the handset owners are required to enter the devices’ IMEI number, or the International Mobile Equipment Identity, in the online database. IMEI is a unique number — like fingerprint for electronic devices — that helps identify the serial number of the mobile phone.

The code is usually printed inside the battery compartment of the phone, but can also be displayed on screen on most phones by entering *#06# on the dial pad, or alongside other system information in the settings menu on the operating systems of smartphones.

The move comes soon after the mobile phone registry scheme the initial phase of which was launched by the government late last month.

In a bid to curb smuggling of cellphones, the Telecoms Ministry, IRICA and the Industries Ministry introduced a plan they call ‘Mobile Registry’ according to which local operators are barred from offering services to contraband phones and only registered devices can be connected to the local mobile network.

 Different for Tourists

Ahmadkhani says that foreign tourists will be exempt from the new regulations.  “A different system for activating handsets of ‘temporary visitors’ has been devised and will be announced soon.” He did not elaborate.

In the past foreign travelers could purchase a SIM sold by local operators and use their handsets during their stay in Iran without any registration.

The time involved and complexity of registering the phones could discourage foreign visitors and compel them to instead opt for roaming services instead of buying a locally available SIM. For using roaming services the phones are not required to be registered.

 Tax Loss

The registry scheme plus IRICA’s new restrictions on cellphone suitcase trade are among plans by the government to curb its tax revenue losses caused partly by the illicit import of cellphones -- a temptation few brokers and middlemen can avoid.

Like in most developing and developed countries there is a huge demand for cellphones in Iran with a sort of ‘craze’ in and among most people to change their handsets every few months.

Head of Iran Cellphone Importers Association Mahmoud Saffar says, “Annually 12 to 15 million mobiles are sold in Iran with 95% of handsets entering the country illegally.”

The IRICA says it incurred $625 million in lost revenues in the last fiscal that ended in March due to the rampant smuggling of cellphones.