Bank Guarantee Hike Binding

Bank Guarantee Hike BindingBank Guarantee Hike Binding

Iran’s Cultural Heritage, Handicrafts and Tourism Organization about a month ago raised the amount of bank guarantee furnished by travel agencies and tour operators to obtain tour licenses.

Previously, the amount guaranteed by a bank was 50 million rials ($1,500), but the organization has raised it to 500 million rials ($15,000)–a tenfold increase.

Travel agencies strongly objected to the move, arguing that the guarantee hardly prevents fraud, because typical violations incur fines far beyond $15,000, ISNA reported.

Last week, Akbar Ghamkhar, a Tehran Tour and Travel Agencies’ Association board member, said ICHHTO’s tourism deputy, Morteza Rahmani Movahed, had stated that the decision was based on careful studies and factored in inflation.

“The issue is going to be reviewed later, but until then travel agencies that need to renew their permits have to comply with the new regulations if they are to retain their licenses,” he said at the time.

However, Movahed said that after reviewing the case, the decision to increase the amount of bank guarantees was found to be sound, final and legally binding.

The official said a directive issued 10 years ago allows the organization to revise the bank guarantee amount every two years, but the directive was never observed until now.

“Legally, ICHHTO can raise the amount even higher, but due to the current economic conditions, we decided that a ‘minimum’ increase would suffice,” he said.

Movahed said coming up with $15,000 is not a difficult task for travel agencies, “but some tend to make a big deal out of these things”.

Asked whether or not the guarantee would deter fraud, he said a bank guarantee is one of the main conditions for operating a travel agency, and has been so since 2004.

“Travel agencies are obliged to provide quality services at the right prices to consumers, and certain conditions have to be met to ensure people receive proper services,” Movahed said.