Archive

In our newsletter, you will find the latest news and comments on legal and trade-related developments in various areas of Iranian commercial and financial law and practice.

Contents

Iran Seeks Domestic and Foreign Investment in Marine Industries Export of Livestock Subject to high Levies Exemption of Import of Gold and Silver Billets from Customs Duty Agents and Branches of Foreign Exporters Liable before Iranian Consumers Foreign Transit of Tobacco Products through Qeshm Customs International Licenses, License Plates Rule Changes Entry of Hazardous Wastes from Iraq into Iran Banned Permit of Iranian Tobacco Company Required for Export and Import of Tobacco Products Iran Bans Indecent Chinese-made Female Trousers Clarification of VAT Implementation in Free Trade-Industrial Zones and Special Economic Zones Increase of Tariffs on Imported Rice Export of New or Used Foreign Goods 20% CBT Discount for Import of Goods through Bushehr Customs  Universal Quality Evaluation of Goods and Services Decreed Amendment of Article 23 and its Note and Article 24 Of the Implementing Regulations of the Foreign Investment Promotion and Protection Act  Foreign Goods with Iranian Brands Disallowed Tax Holiday Increased to 20 Years in Free Zones TIR Carnet Must be in English, French and Russian Amendment to the Banking By-law in Free Zones Rules of Distribution of Medical Equipment for Manufacturers and Importers Information in Arabic Obligatory for Imports to Iraq Identification Number Required for Iranian and Foreign Companies New Tariffs for Protection of Domestic Products Iran Opens its Doors to Foreign Banks Enforcement of The Penal Procedure Law Extended Lower Tariffs at Khorramshahr Standard Ordinance on Export of Customized Goods Regulations for Implementing the Law of Patents, Industrial Designs and Trademarks Passed Importation of Misleadingly Marked Goods Banned Tobacco Products Must Bear Name of the Country of Manufacture Free Trade Agreement to be Signed between Iran and (P)GCC Imported Dental Material Exempt from VAT Full Details of Pro-forma Invoices Obligatory Quarantine Conditions set for Importation of Fruits from Pakistan, Vietnam, India, Turkey, Argentina General Policies of the Fifth Development Plan Outlined

30 December 2009

Iran Seeks Domestic and Foreign Investment in Marine Industries

Nourlaw.com (30 December 2009) -- The Iranian government by virtue of Decree number K42069 T/193538 dated 1/10/1388 (22 December 2009) has detailed the implementing regulations of the Law of Development and Protection of Marine Industries. It is stipulated in the by-law that the Supreme Council of Marine Industries shall examine and outline the mechanisms for attraction of domestic and foreign investments in marine industries and affiliated affairs with due consideration of related laws and regulations. As defined in Article 1 of the decree, marine industries include all works relating to the research, design, manufacture, maintenance and repair of every type of vessel. Article 5 has foreseen exemption of payment of port levies for Iranian and foreign vessels harbouring or dry docked at domestic workshops for repair. As stated in Article 6, import of maritime items which are not produced in the country shall be undertaken within the purport of Article 5 of the Law. According to Article 7, the Ministry of Foreign Affairs shall issue an entry visa for foreign marine experts within one week and such foreign nationals shall be authorized to work for the related marine entities for two months without obtaining a work permit from the Ministry of Labor.

2 December 2009

Export of Livestock Subject to high Levies

Nourlaw.com (2 December 2009) -- To cope with the increasing exit of livestock from the country and in order to regulate domestic consumption, Commission Article One of the Law of Export and Import Regulations has decreed in its session held on 8 Azar 1388 (29 November 2009) that as from 1/10/1388 to 31/1/1389 (22 December 2009-20 April 2010) a levy of 60% shall be imposed on export of livestock including sheep and goats for four months.

2 December 2009

Exemption of Import of Gold and Silver Billets from Customs Duty

Nourlaw.com (2 December 2009) -- Iranian Customs in its circular letter number 224/73/696/113/193390/202691 dated 8/9/1388 (29 November 2009) has declared that in light of the addition of one note to Article 4 of the Fourth Economic, Social and Cultural Development Plan, the import of all types of gold and silver billet shall be exempted from the payment of any customs duty (4% of the CIF value of the imported good). The exemption signifies the government’s efforts to control the surging price of gold in the domestic market.

18 November 2009

Agents and Branches of Foreign Exporters Liable before Iranian Consumers

Nourlaw.com (18 November 2009) -- Iran now has a consumer protection law safeguarding the rights of consumers against domestic producers and importers of goods and services. The Law of Protection of the Rights of Consumers, approved on 7 October 2009, was published on 4 November 2009 in the Official Gazette and shall go into force on 20 November 2009. According to Article 1 of the law a “Consumer is any natural or juridical person who buys any goods or services” and the suppliers of goods and services are “all the producers, importers, distributors, sellers of goods and providers of technical and professional services who offer goods or services to the consumers directly or indirectly, wholly or partially”. Article 2 emphasizes “all the providers of goods and services, jointly and severally, shall be responsible respecting the genuineness and flawlessness of the goods and services”. Article 3 mandates that the providers of goods and services also give consumer guarantees. The law foresees cancellation of transaction, redress of damages and punishment of fraudulent providers of goods and services. By virtue of Article 16 in the case of foreign companies, in addition to the mother company, the branch or their agency in Iran shall be liable for damages and injuries and must remedy the damages.

21 October 2009

Foreign Transit of Tobacco Products through Qeshm Customs

Nourlaw.com (21 October 2009) -- Iran Customs in its circular letter number 8/55/282/762/157341 dated 14/7/88 (6 October 2009) has declared that Qeshm Island customs has been added to the list of authorized customs facilities for transit and export of tobacco products provided that these products are manufactured in the Qeshm Free Zone.

21 October 2009

International Licenses, License Plates Rule Changes

Nourlaw.com (21 October 2009) -- In accordance with the amendment made on 17/6/1388 (8 September 2009) by parliament to the Law of Transport and Transit of Foreign Goods in the Territory of the Islamic Republic of Iran, the Disciplinary Force (police) of the Islamic Republic of Iran shall be in charge of issuing the driving licenses, title deeds and license plates of the cars, and the tasks of translation and changing valid driving licenses and other documents issued by the police into international documents shall be the responsibility of the Touring & Automobile Club of the Islamic Republic of Iran.

06 October 2009

Entry of Hazardous Wastes from Iraq into Iran Banned

Nourlaw.com (06 October 2009) -- A newly published decree makes clear that entry of hazardous wastes into the territory of Iran faces international legal restrictions. The director general of the Department of the Environment of the southern province of Hormozgan has issued guideline No. 113023/2150 dated 3/5/88 (25 July 2009) as follows: “According to Part 5 of Article 4 of the Basel Convention on the general commitments of the convention members respecting import and export of hazardous wastes, the convention members must not allow hazardous wastes and other kinds of wastes to enter from a non-member country. (However) it is reported at present that a certain application exists for importing wastes from Iraq. Therefore, please inform the applicants that since Iraq is not a signatory to the Basel Convention, import and export and transit of any type of wastes must be stopped. The guidelines add that for lifting the ban of each shipment a permit from the Water and Soil Pollution Examination Bureau of the Department of the Environment shall be required. Part 5 of Article 4 of the Convention referred to in the aforesaid letter, stipulates that a Convention signatory shall not permit hazardous wastes or other wastes to be exported to a non-signatory state or to be imported there from. As for the background of the Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes and their Disposal (Basel Convention), the website of the Convention explains that in the late 1980s, a tightening of environmental regulations in industrialized countries led to a dramatic rise in the cost of hazardous waste disposal. Searching for cheaper ways to get rid of the wastes, “toxic traders” began shipping hazardous waste to developing countries and to Eastern Europe. When this activity was revealed, international outrage led to the drafting and adoption of the Basel Convention. Iran joined the Basel Convention on 5 January 1993.

06 October 2009

Permit of Iranian Tobacco Company Required for Export and Import of Tobacco Products

Nourlaw.com (06 October 2009) -- Iranian Customs in its circular letter number 71/480/747/141791/154349 dated 11/7/88 ( 3 October 2009) has declared: “Following the circular letter number 54/102/525/948/335155 dated 24/12/87 (14 March 2009 ) of the acting head of the legal affairs department regarding the guidelines for preventing the smuggling of tobacco products, attached hereto please find the copy of letter number 88/21475 dated 22/6/88 (13 September 2009 ) of the Iranian Tobacco Company and the exact manner of implementation of Articles 41 and 42 of the said guidelines (attached to the circular) concerning carrying out the formalities for export of tobacco products through the customs. The obligation of obtaining the explicit permission of the Iranian Tobacco Company for domestic and joint venture tobacco goods is strongly emphasized”.

29 September 2009

Iran Bans Indecent Chinese-made Female Trousers

Nourlaw.com (29 September 2009) -- Iranian Customs in it circular letter number 160/73/214/113/125373/139724 dated 23/6/88 (14 September 2009), has emphasized that as per the instructions in a letter from the Ministry of Interior, all customhouses must make stringent measures for inspecting the inscriptions on all clothes imported into Iran before clearing them for the market. The Ministry of Interior letter Number 97925/81/8 dated 2/6/1388 (24 August 2009) to the Iran Customs reads: “With regard to the widespread distribution of the insulting and indecent Chinese-made female trousers with the wording ‘Bismillah Al-Rahman Al-Rahim’ embroidered on the back pockets and now available in some female clothing shops in the Afsarieh District and other areas of Tehran in the past weeks, you are kindly requested, in addition to presenting a report explaining the matter, to take appropriate measures for curtailing and ending this malicious cultural and social phenomenon which is an explicit insult to the Islamic values as well as cultural and social norms of the Islamic Republic of Iran, and inform this ministry of the result of your action.”

15 September 2009

Clarification of VAT Implementation in Free Trade-Industrial Zones and Special Economic Zones

Nourlaw.com (15 September 2009) -- The head of the Tax Affairs Organization has declared the following in circular letter number 54409 dated 26/5/88 (17 August 2009): Whereas the manner of implementation of the Value-added Tax (VAT) within the boundaries of the Free Trade-Industrial Zones and Special Economic Zones has caused questions for the tax affairs departments and tax payers alike, it is now necessary to set a uniform practice for correct implementation of regulations and on the basis of the purport of Articles 6,7,13 and 52 of the said law, it is stipulated that: 1- Transaction of goods and services between the people and business persons domiciled in the areas of the Free Trade-Industrial Zones and Special Economic Zones shall not be subject to the tax and levies foreseen in the aforesaid law inside the boundaries of the said zones. 2- Export of goods and services from the said zones abroad, as well as import of goods and services into the said zones shall not be subject to the tax and levies foreseen in the Law. 3- Import of goods and services from the said zones into the custom territory of the country shall be subject to payment of tax and levies. It is worth noting that by virtue of Article 13 of the VAT Law, the export of goods and services abroad through the official exit points, shall no longer be subject to the tax and levies foreseen in the Law and the taxes paid in this respect will be reimbursed against presentation of the exit note issued by the customs (in case of goods) and supporting evidence and documents.

15 September 2009

Increase of Tariffs on Imported Rice

Nourlaw.com (15 September 2009) -- In a measure to quell the growing discontent of domestic rice producers, the Iranian government has increased the import tariff on rice. According to the declaration of the Ministry of Commerce as of 22 Shahrivar 1388 (13 September 2009) to 1 Dey 1388 (22 December 2009), the Commercial Benefit Tax (CBT) shall increase from 21% to 41% of the CIF (cost insurance freight) value of the rice imported under the harmonised customs codes 10061000, 10062000, and 10063000. Importers must also pay 4% for the entry dues and 3% for VAT which if added to the increase CBT, would be nearly 50% of the CIF value of the imported rice.

12 September 2009

Export of New or Used Foreign Goods

Nourlaw.com (12 September 2009) -- For facilitating the export of foreign goods which have been imported into Iran, Iranian Customs in its circular letter number 146/71/480/747/114837/131627 dated 11/6/88 (2 September 2009) has declared that export of foreign goods (whether new or used) which have import documents is possible after inspection of the import documents, verifying the authenticity of the goods against the import documents and checking the type of the allocated foreign currency (to insure it was not subsidized). If the import documents indicate the goods have been imported with subsidized foreign currency, its export shall be allowed with the approval of the Ministry of Commerce. The Circular letter adds that “Export of new foreign goods lacking import documents shall be made possible by presenting the permit of the Ministry of Commerce”. In another part of the circular letter it is stated: ”The export of used foreign goods lacking import documents needs a permit from the Ministry of Commerce if they fall under the four classes of items foreseen in Article 36 of the Fourth Economic, Social and Cultural Development Plan (production line machinery, genetic reserves, subsidized goods, artifacts and cultural heritage), and other foreign used goods do not need a permit for being exported”.

25 August 2009

20% CBT Discount for Import of Goods through Bushehr Customs

Nourlaw.com (25 August 2009) -- Iran Customs in its circular letter No.73/2351/103/85930 dated 21/4/88 (12 July 2009) has announced that by virtue of the Council of Ministers’ decree No. 210/1403 dated 13/4/1388 (4 July 2009) the discount of the Commercial Benefit Tax (CBT) for importation of goods through the customs of the Persian Gulf port city of Bushehr has increased from 15% to 20%. The said decision, taken in order to boost economic activity in Bushehr, came into force as of 23 July 2009. In addition to the customs duty which has been fixed by Parliament at 4% of the Cost Insurance Freight (CIF) value of the goods, CBT is a fluctuating tax calculated as per the CIF value of the goods. CBT is determined by the Council of Ministers in light of the economic conditions and policies of the country.

29 August 2009

Universal Quality Evaluation of Goods and Services Decreed

Nourlaw.com (25 August 2009) -- Iranian Minister of Economic Affairs and Finance, Minister of Industries and Mines, the President’s deputy for Management and Human Resources, and the President’s Deputy for Strategic Planning and Control, in their decree No.K43180T/109124 dated 28/5/1388 (19 August 2009) have stipulated that the Institute of Standards and Industrial Research of Iran (ISIRI) , shall be obliged, within two years from the notification date of the decree, to revise, draft and declare at least 80% of the national standards relating to the quality evaluation system to be in accord with international standards. ISIRI is the sole organization in the country authorized to develop and designate official standards for products. As foreseen in Article 1 of the decree, Quality Evaluation is defined as ascertaining compatibility of the product, services, processes, systems and business entities with designated obligations which include testing, inspection, and issuance of a certificate and accreditation by business entities. According to Article 4, all business entities shall be bound to observe the quality evaluation system within two years after notification of the related national standards. On the basis of Article 5, observance of the regulations of the decree shall be also mandatory with respect to imported goods and foreign firms operating in Iran.

12 August 2009

Amendment of Article 23 and its Note and Article 24 Of the Implementing Regulations of the Foreign Investment Promotion and Protection Act

Nourlaw.com (12 August 2009) -- No: K40108 T/99662 Date: 18/5/1388 (9 August 2009) Ministry of Economic Affairs Central Bank of the Islamic Republic of Iran The cabinet minister members of the Economic Commission in their session of 12/11/1387 (31 January 2009 ) acting upon recommendation No. 37657 dated 12/3/1387 (1 June 2008) of the Ministry of Economic Affairs and Finance and on the basis of Article 25 of the Foreign Investment Promotion and Protection Act of 1381(2002) and in compliance with Decree No. H373T/164082 dated 10/10/1386 (31 December 2007) , resolved that Article 23 and its Note and Article 24 of the Implementing Regulations of the Foreign Investment Promotion and Protection Act subject of the Decree No.H27032T/32556 dated 23/7/1381 (15 October 2002) be amended as follows: Article 23 – Transfers referred to in Articles 13,14 and15 of the Foreign Investment Promotion and Protection Act, relating to any method of investment subject of Article 3 of the Act, shall be made through the purchase of foreign exchange from the banking system. The Board, on the basis of the report of the Audit Firm on the latest status of the principal capital, amount of profit and capital gains belonging to the Foreign Investor, shall set the amount of the transferable sums (which in case of the investments falling under Part 2 of Article 3 of the Act would be calculated solely on the economic performance of the project) and issue , on a case by case basis, a (capital) repatriation permit with the approval of the Ministry of Economic Affairs and Finance. Note- The conditions set out at the beginning of this Article shall not apply to the foreign investment within the framework of contractual arrangements such as buy-back where the repatriation of the principal capital and their other transfers will be made from the export of goods. Article 24-In implementation of Part A of Article 2 of the Act, in the event that it is stipulated that the products or services of the investee corporation should be exported, the investee corporation is obliged to submit the related customs permit or the service export certificate to the Organization. (Published in the Official Gazette dated 21/5/1388 / 12August 2009)

29 July 2009

Foreign Goods with Iranian Brands Disallowed

Nourlaw.com (29 July 2009) --Iranian Customs in its circular letter Number 104/73/214/113/83276/100211 dated 5/5/88 (27 July 2009) has clearly specified that on the basis of the opinion of the Ministry of Industry and in order to protect domestic producers, the import of foreign-made goods bearing the brand of Iranian goods produced in Iran, is disallowed and such goods must be returned to their point of origin. The ruling is line with the general prohibition of the import of goods that mislead consumers regarding the actual place of manufacture.

15 July 2009

Tax Holiday Increased to 20 Years in Free Zones

Nourlaw.com (15 July 2009) -- In order to attract more investment into Iran’s free trade-industrial zones,  parliament has increased the tax holiday for investors to 20 years from the previous 15 years, by amending Article 13 of  the Law on the Manner of Administration of the Free Trade - Industrial Zones on 6 Khordad 1388 (27 May 2009). The amended article which was published a few days ago in the Official Gazette now  reads ”The natural and juridical persons engaged in different types of economic activity in the zone shall be exempt for 20 years from payment of the revenue and capital tax subject of the Direct Taxation Act, in proportion to any kind of economic activity from the date of exploitation mentioned in their permit, and after expiry of the 20 years, they shall be subject to the tax regulations to be approved by the parliament on the recommendation of the Council of Ministers”.

17 June 2009

TIR Carnet Must be in English, French and Russian

Nourlaw.com (17 June 2009) -- Iranian Customs in its circular letter Number 55/579/726/65280 dated 20/3/88 (10 June 2009) has declared since the official languages of the Transit International Routier (TIR) Convention are English, French and Russian, in those cases wherein the Carnets are presented in a different language at Iranian Customs' posts, a Farsi translation or translation into one of the official languages is required. Iran is a contracting party to TIR which was created to be an effective international customs transit system for facilitating international trade and transport.

03 June 2009

Amendment to the Banking By-law in Free Zones

Nourlaw.com (03 June 2009) -- The Council of Minister in its decree Number H40409 T/45624 dated 23 May 2009 has amended the By-law of Monetary and Banking Operations in the Free Trade-Industrial Zones for facilitating the founding of banks and offering services. According to the Amendment, the following shall be added as Note 3 to Article 4 of the By-law: “The Central Bank of the Islamic Republic of Iran shall be bound to proceed with issuing the permit within one month from the time that it receives the proposal for establishment of a bank or financial institution from the Free Zone Authority and in the event that establishment is impossible due to the related laws and regulations, it should inform the Authority of the matter”. As emphasized in the Amendment, the following shall be added as Note 1 to Article 14 of the By-law:  "The commercial banks shall be bound to make arrangements for upgrading at least one of their branches in the free zones into an independent branch of highest caliber and give maximum powers to them for offering the largest scale services to domestic and foreign investors."

03 June 2009

Rules of Distribution of Medical Equipment for Manufacturers and Importers

Nourlaw.com (03 June 2009) -- Director General of the Medical Equipment Department of the Ministry of Health and Medical Education, has published the Rules for the Manner of Distribution and Supply of Medical Equipment ratified on 23/2/1388 (13 May 2009) by the minister. The rules deal with the tasks and responsibilities of domestic manufacturers, importers, suppliers and distributors of medical equipment for “regulating procurement and supply of medical equipment in light of the necessity of safeguarding the safety and good quality of such goods”. As stated in Article 1 of the rules, a “distribution agent” is a natural or juridical person that subsequent to gaining official and legal agency from the manufacturers and importers of medical equipment, has received the related permit from the Medical Equipment Department of the Ministry of Health and Medical Education for distribution of the said equipment. By virtue of Article 2 of the rules, all the manufacturers and importers should have completed in full activity identification papers. As stressed in the same article “promotion, distribution and supply of medical equipment by the importer who lacks official agency of the foreign manufacturing companies at the discretion of the Directorate General of the Medical Equipment, shall be considered as a supplier of contraband medical equipment. According to Article 3 “All the imported medical equipment, in addition to the importation permit issued for them by the Directorate General of the Medical Equipment Department, must be in receipt of the custom clearance permit from the same directorate as well." Note 2 of the said article, addresses the obligation of manufacturers and importers to use holograms and ID tags on the medical equipment on the order of the aforesaid directorate general. Should the goods lack these items this will result in considering the medical equipment as contraband. Article 4 authorizes all the manufacturers and importers of medical equipment to distribute and supply the equipment directly with due observation of the prevailing laws and regulations. As stated in Note 5 of the said article, “All manufacturers and importers of medical equipment shall be bound to nominate their official distribution agent within three months”. In Note 1 of Article 5 it is emphasized that issuance of official and legal invoices by the manufacturer, importer and distribution agent is a must for distribution of medical equipment. Refusing to issue invoices in such manner, shall mean the goods are considered to be contraband. Article 15 of the rules warns that procurement, storing, supply and sale of medical equipment lacking legal and official supporting documents or performing the said actions outside the stipulation of the rules, shall be considered illegal procurement, consumption and supply of contraband goods and the perpetrators shall be subject to prosecution.

20 May 2009

Information in Arabic Obligatory for Imports to Iraq

Nourlaw.com (20 May 2009) -- According to circular letter number 42/71/3100/747/26507/32980 dated 16/2/88 (6 May 2009) of the Iran Customs, the Iraqi authorities had given a three month grace period (ending 2 May 2009)  for the export of Iranian goods without Arabic language specifications into Iraq.  Hence, as of 3 May 2009 any Iranian goods for export to that country must have all pertinent information sought by the Iraqi national standard authority included in Arabic or such exports would not be released from Iraqi customs and sent back to Iran.

06 May 2009

Identification Number Required for Iranian and Foreign Companies

Nourlaw.com (06 May 2009) -- In an initiative aimed at achieving greater transparency concerning the activity of companies and other juridical entities, the Iranian government, in decree number H 39271T/16169 dated 29/1/1388 (18 April 2009), has made the acquisition of identification numbers for Iranian and foreign companies and foreign individuals obligatory.According to Article 2 of the “By-law for Allocation of a National Identification Code to all Iranian and Juridical Persons”, in line with the  announced timing schedule of the related registration organizations, all juridical persons are bound to fill out the national identification number registration form to get a number”. The Companies Registry and other organizations charged with the task of registration shall handle the related form and documents for issuing the identification number and national ID card. Juridical persons are obliged to inform the relevant registration organization of any changes in the particulars mentioned in the card, as well any change in authorized signatories before or upon the expiration date of the card, in order to be issued a correctly modified new card. The registration organization should store the information on the juridical persons in a data base for the easy access of other organizations and the public to the extent permitted by the regulatory board as foreseen in Article 16 of the said decree. By virtue of Article 11, all executive organs, upon the declaration of the regulatory board of the said Article 16, shall be obliged to insert the national identification number of the juridical persons and the postal code of their headquarters on any card, permit or certificate of activities and shall likewise refuse to extend any permits, facilities, possibilities, contracts and tender participation to the juridical entities without the national identification number. As stated in Article 14, all juridical entities, following the declaration of the regulatory board, shall be obliged to mention their national identification number and postal code of their headquarters on their business card, letterhead, promotional material, financial statements, invoices and the like. The national identification numbers must be mentioned in the instruments and deeds drawn up at the notaries' public and real estate agencies. It is stipulated at the end of the decree, that all the aforesaid arrangements and rules should be materialized within 18 months from the date of notification of the decree. In another decree, number H 40266T/16173 dated 29/1/1388 (18 April 2009) all foreign nationals who reside in Iran or apply for transit or entry visas and foreign juridical entities such as companies, institutes, international organizations, and non-governmental organizations which are in any way in connection with the Islamic Republic of Iran, should receive a personal and or organizational identification number from the related executive organs. The identification number of natural foreign persons shall include name, birth date, country of birth, number of the ID document, education degree, nationality, gender, and the name of the father or the family name or the grandfather's name. The identification number of foreign entities shall include their name, type, sphere of activity and permit or registration number in Iran. As foreseen in Article 7, the executive organs, upon the declaration of the regulatory board subject of Article 9 of the decree, shall mention the personal identification number of the foreign persons in their visa, residence permit, work permit, marriage license, official papers and any related official documents. To reiterate, it is stipulated at the end of the decree that all the aforesaid arrangements and rules should be materialized within 18 months from the date of notification of the decree.

22 April 2009

New Tariffs for Protection of Domestic Products

Nourlaw.com (22 April 2009) -- In Article 40 of the Iranian National Budget for the year 1388 (20 March 2009 – 19 March 2010), a tariff policy has been adopted for protecting certain domestic products. The government is accordingly obliged to set the average of the effective rate of the tariff of imported goods at 13% and for protecting agricultural consumable end products, the tariff is set equal to that of cars while a 30% tariff is set for heavy construction and agricultural machinery such as tractors, bulldozers and loaders.

14 April 2009

Iran Opens its Doors to Foreign Banks

Nourlaw.com (14 April 2009) -- For the first time in the three decades since the 1979 Islamic Revolution in Iran, the Islamic Republic  is set to allow foreign banks to establish branches in the country and engage in normal banking operations. For years, Article 44 of the Iranian Constitution Law which placed banking activities exclusively in the hands of government, in addition to the Law on Usury Free Banking Operations blocked foreign banking operations from conducting business in mainland Iran. A handful of foreign bank branches and representative offices extant in the country were allowed to undertake administrative and coordination affairs but were not permitted to open customer accounts inside the territory of mainland Iran, receive deposits or extend other conventional facilities.  Foreign banks were, however, under special conditions, allowed to function normally in the Iranian free zones. With the long-awaited privatization law coming into force in the summer of 2008, allowing the normal functioning of foreign banks in Iran is viewed as a major initiative by the Central Bank of Iran (CBI). The rules for regulating the activity of foreign banks are set forth in the decree dated March 18, 2009 by the Council of Ministers which has been made public by the CBI , a translation of which made by Nourlaw.com as here below. The Executive By-law of the Manner of Establishment and Operations of Foreign Bank Branches in Iran No. H 41703T/1232 – 9.1.1388 (March 29, 2009) Central Bank of the Islamic Republic of Iran The Council of Ministers in the course of a session held on 28.12.1387 (March 18, 2009) pursuant to the letter of proposal No. 87/67813 dated 3.10.1387 (December 23, 2008) by the Central Bank of the Islamic Republic of Iran and by virtue of Article 138 of the Constitutional Law of the Islamic Republic of Iran, approved the Executive By-law of the  Manner of  Establishment and Operations of Foreign Bank Branches in Iran in Iran as follows: Part One – Definitions Article 1 – In the By-law herein the following terms will be used in the related explanations: 1 – Iran: The Islamic Republic of Iran. 2 - The By-law: The Executive By-law of the Manner of Establishment and Operations of Foreign Bank Branches in Iran 3 – The Central Bank: The Central Bank of the Islamic Republic of Iran. 4 – Bank activities: Receiving all manner of deposits from the general public and using the same for providing loans and facilities to applicants and offering all financial instruments within the framework of the State Monetary and Banking Law approved on 1383 (2004-2005), The Law on Usury Free Banking Operations Law approved in 1362 (1983-1984) and the Law on Regulating the Unorganized Money Market approved in 1383 (2004-2005). 5 – Foreign Bank: The juridical persons registered as a bank outside of Iran, engaged in banking activities and being an applicant for establishing a branch office in Iran. 6 – Branch: An operational unit of a foreign bank which undertakes banking operations in Iran within the framework of the Articles of Association and requirements contained in this      By-law. 7 – Contribution Capital: Funds which the foreign bank puts at the disposal of the branch for its activities. Part Two –Manner of Establishment Article 2 – A foreign bank which has been operating (in Iran) for at least five years, may enter into banking operations in Iran through a branch office and with observance of the contents of this By-law. The financial performance of the foreign bank during the last three years must indicate its profitability during all the three years. Article 3 – The amount of contribution capital of the foreign bank to its branch in Iran shall be at least Euro 5m or its equivalent in other valid foreign currencies (at the discretion of the Central Bank) with one hundred percent of this amount being deposited with the Central Bank prior to issuing the permit authorizing the establishment of the branch office. Note 1 – The Central Bank, in case of need, may change the minimum of the contribution capital of the foreign bank to its branch office in Iran. Note 2 – Repatriating the contribution capital of a foreign bank can occur only at the time of dissolution of the branch. Note 3 – The manner and conditions of importing the contribution capital of the foreign bank may be in accordance with the Foreign Investment Promotion and Protection Act (FIPPA) approved in 1381 (2002-2003) and its executive by-law subject to the decree No. H 270 32T / 32556 dated 23/07/1381 (15 October 2002). Note 4 – The period of validity of the establishing permit will be three months which can be extended to one year at the discretion of the Central Bank. Article 4 – The foreign bank is obliged to observe the procedures for establishing a branch and receiving the necessary permits in accordance with the Executive Directives of this By-law, which shall be approved by the Central Bank. Part Three –  Manner of Activity and Supervision Article 5 – Banking operations of the branch shall be subject to the regulations of the Law on Usury- Free Banking Operations. Article 6 – The required qualifications and expertise for obtaining managerial posts within a branch office shall be determined by the Central Bank. Article 7 – The branch is obliged to make a statutory deposit of trust in the Central Bank. Note - The amount of the deposit shall be determined by the Central Bank on the basis of the types of deposits. Article 8 – The branch is obliged in its activities to observe supervisory rules in connection to the amounts of liquidity, fulfilling the commitments and limits of facilities and large scale undertakings, granting facilities to related persons, insuring the deposits, risk management, accountancy practices and standards, as well as putting in place mechanisms related to the interior control system, which shall be determined by the Central Bank. Article 9 – The Central Bank is responsible for oversight of the branch activities. The Central Bank exercises the necessary supervisory and corrective measures in order to protect the depositors' resources and assures observation of the regulations of this By-law and its Executive Directive as well as the stability and safety of the branch management in managing future processing and or probable risks and the sufficiency of the branch resources for controlling such risks. Part Four – Closing Down a Branch Article 10 – The branch shall be closed down in the following instances: A – In case of non-compliance with the supervisory and corrective directives of the Central Bank. B – Upon the request of the parent foreign bank. C – If the branch ceases its activities and operations for a working week without the permission of the Central Bank. D –Should the Central Bank verify that the information and documentation supplied by the foreign bank for establishing a branch office is incorrect or been altered. Article 11 – Decisions related to the bankruptcy and liquidation of the foreign bank in connection with closing down a branch shall not be executable unless the Central Bank shall be confident of the fulfilment of undertakings of the branch related to the depositors and other clients of the bank. Article 12 – The foreign bank shall not close down its branch before the fulfilment of the branch's undertakings to its creditors and other clients in Iran. Article 13 – The Central Bank shall be obliged to notify the Executive Directive of the present By-law which governs the manner of establishing, activity, supervision and closing down of foreign bank branches in Iran.        First Deputy President   Parviz Davoudi

14 April 2009

Enforcement of The Penal Procedure Law Extended

Nourlaw.com (14 April 2009) -- The Islamic Consultative Assembly in a session held on 4.12.1387 (Feb. 22, 2009) approved extending the provisional enforcement period of the Law on Civil Procedure of Public and Revolutionary Courts (on Criminal Affairs), ratified on 28.6.1378 (September 9, 1999) for one year, up to the end of 1388 (March 20, 2010).

14 April 2009

Lower Tariffs at Khorramshahr

Nourlaw.com (14 April 2009) -- In a meeting convened on 24.12.1387 (March 14, 2009) the Council of Ministers approved that the rate of reduction of commercial benefit tax for importing goods via the port of Khorramshahr (subject to decree No. H  303 66T / 704 66 dated 27.12.1382 (March 17, 2006)) shall be 25 percent in the current Iranian year.

04 March 2009

Standard Ordinance on Export of Customized Goods

Nourlaw.com (04 March 2009) -- Iranian Customs in its circular letter number 450/71/930/747/308258/321698 dated 10/12/87 (28 February 2009) states that regarding standard regulations on the export of (Iranian) goods with the technical specifications sought by the buyer, the Institute of Standards and Industrial Research of Iran (ISIRI) has announced that exporters of such goods can refer to ISIRI and obtain the certificate of registration of technical specifications by providing the following documents: 1- The contract concluded between the buyer and the seller including all the specifications sought by the buyer, as well as the quantity of the goods for export, all certified by the chamber of commerce and Iranian embassy in the country of the buyer. 2- The sample produced according to the technical specifications sought by the buyer. 3- Certificate of the laboratories of ISIRI verifying the compatibility of the sample with the required specifications.

25 February 2009

Regulations for Implementing the Law of Patents, Industrial Designs and Trademarks Passed

Nourlaw.com (25 February 2009) As we reported on 7 May 2008, in a measure to cope with the changes in the world of trade and industry and stay abreast of developments in the area of intellectual property, on January 2008 Iran passed new legislation, “The Law of Registration of Patents, Industrial Designs and Trademarks”. The Judiciary under decree number 1/87/9830 dated 29/11/1387 (17 February 2009) has now drawn up the implementing regulations of the Law which was published in the Official Gazette Number 18639 dated 5 Esfand 1387 (23 February 2009). The bylaw has made practical execution of the said law possible. Implementation Regulations of the Law of Registration of Patents, Industrial Designs and Trademarks contains192 articles and is divided into the following parts. Section 1: Generalities Section 2: Registration of Patents Chapter 1: Submission of Declaration Chapter 2: Transfer, Amendment, Withdrawal and Registration of Patent Chapter 3: Examination of Declaration and Registration of Patent Chapter 4: Issuance of Mandatory Exploitation License Chapter 5: Changes, Assignments and Waivers Respecting Registered Patent Chapter 6: Objection to Rejection and to Registration Application and Litigation for Nullification of the Patent Certificate Chapter 7: International Declaration in Accordance with the Patent Cooperation Treaty (PCT) Chapter 8: Costs Section 3: Registration of Industrial Designs Chapter 1: Submission, Amendment, Withdrawal, Assignment and Registration of Declaration Chapter 2: Examination of Declaration and Registration of Industrial Design Chapter 3: Extension of Registration of Industrial Design Chapter 4: Changes, Assignments and Waivers Respecting a Registered Industrial Patent Chapter 5: Objection to Rejection and to Registration Application and Litigation for Nullification of the Industrial Design Certificate Section 4: Registration of Marks Chapter 1: Submission, Withdrawal, Registration and Rejection of the Declaration Chapter 2: Examination and Publication of Declaration Notice Chapter 3: Assignment, Amendment and Objection to Declaration Chapter 4: Registration of Mark and Extension of Registration Chapter 5: Collective Mark Chapter 6: Changes, Assignments and Waivers Respecting a Registered Mark Chapter 7: Nullification of Registration of Mark Chapter 8: International Registration of a Mark in Accordance with the Madrid Agreement and Protocol Section 5: General Regulations Chapter 1: Costs Chapter 2: Electronic Registration and Manner of Access to Information Chapter 3: Commission Chapter 4: Dissemination of Information and Issue of Original and True Copy Certificate Chapter 5: Correction of Errors, Extension of Duration and Assignment Arrangements Chapter 6: Litigation and Miscellaneous Regulations The Implementation Regulations of the Law of Registration of Patents, Industrial Designs and Trademarks has appendixes such as the official forms and templates for registration of a patent, industrial design and mark, related certificates and international classification of marks.

18 February 2009

Importation of Misleadingly Marked Goods Banned

Nourlaw.com (18 February 2009) -- According to Clause 12 of the Customs Affairs Act, importation of “merchandise which bears on itself or on its wrappings the name or address of a corporation, or other marks or specifications which may lead to the deception of the purchaser and consumer with respect to the original manufacturer, place of make, specifications or qualities thereof'' shall be prohibited. The recent appearance of misrepresented imported goods which in certain cases bear Iranian marks, has led the Import Bureau of Customs to declare in its circular letter 427/73/214/13/303635 dated 5/11/1387 (24 January 2009) to the different customhouses that: On the order of the director general of the Customs and following the circular letter 189/73/214/113/45754/140492 dated 17/5/1386 (8 August 2007) and to insure correct implementation of the regulations and instances mentioned in Clause 12 of Article 40 of the Customs Affairs Act, as well as for safeguarding the rights of the buyers and consumers, it is stipulated that without the pre-coordination and consent of the said Bureau the release of the following items are disallowed: 1- Any goods bearing the standard emblem of Iran. 2- Goods bearing an Iranian trademark and Farsi language script on its packaging. 3- The imported goods subject to Part 3 of the aforesaid circular letter 189/73/214/113/45754/140492 dated 17/5/1386 (8 August 2007).According to this section of the instructions, if the Iranian goods, for any reason, have been manufactured abroad, in this case if the production unit has been previously engaged in that, the goods can be released upon the agreement of the Ministry of Industries and Mines provided that there is an insertion or etching of the name of the country of manufacture.

18 February 2009

Tobacco Products Must Bear Name of the Country of Manufacture

Nourlaw.com (18 February 2009) -- The Technical deputy of the Iranian Customs has declared in circular letter number 73/214/113/265125/303389 dated 15/11/1387 (3 February 2009) that in observation of Clause 12 of Article 40 of the Customs Affairs Act, and in order to prevent any deception of the purchaser, in order to insure the release of tobacco products from the customhouses, it is required that the name of the manufacturing country be distinctly and clearly inserted on all retail cigarettes and other tobacco products.

11 February 2009

Free Trade Agreement to be Signed between Iran and (P)GCC

Nourlaw.com (11 February 2009) -- The first deputy of  President Mahmoud Ahmadinejad  has notified the decree No. H41266 T/204352n dated 7/11/1387 (26 January 2009) to the Ministry of Foreign Affairs and Ministry of Commerce authorizing the Foreign Ministry to sign a preliminary free trade agreement between the Islamic Republic of Iran and the (Persian) Gulf Cooperation Council. The ruling also calls for following up on the required measures that will culminate in the decree's final ratification by parliament. The (Persian) Gulf Cooperation Council is an economic and political policy coordinating forum for the six member states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)). Iran refers to the Gulf Cooperation Council, as the Persian Gulf Cooperation Council (PGCC).

11 February 2009

Imported Dental Material Exempt from VAT

Nourlaw.com (11 February 2009) --  Iranian Customs in circular letter number 74/6107/722/296927 dated 13/11/1387 (1 February 2009) has declared that 17 types of dentistry material currently in use shall not be subject to the 3% value added tax. The specifications of the said material have been mentioned in the decree.

11 February 2009

Full Details of Pro-forma Invoices Obligatory

Nourlaw.com (11 February 2009) -- Iranian Customs in its circular decree number 73/750/113/276229/303301 dated 16/11/1387 (4 February 2009) has stated that according to the order of the Ministry of Commerce, because registration of orders in the Ministry of Commerce is undertaken with the purpose of preparation of precise statistics on national imports, it is required that at the time of registration, importers shall be obliged to provide the ministry with complete pro-forma invoices listing the type, number, value, country of manufacture and port of origin for controlling the type, quantity and value. The above decree mandates that importers specify imported spare parts for products such as computers, notebook computers, mobile phones, vehicles, etc…item by item in the related pro forma. Hitherto they were registered under general headings such as computer parts and the like.

11 February 2009

Quarantine Conditions set for Importation of Fruits from Pakistan, Vietnam, India, Turkey, Argentina

Nourlaw.com (11 February 2009) -- The Iranian Ministry of Commerce in its directives No. 210/4082 dated 22/10/1387 ( 11 January 2009    ) and   No.210/4180 dated 22/10/1387  (11 January 2009  ) has set conditions for the import of fruits and horticulture produce such as tomatoes, lemons, pomegranates, plums, strawberries and apples. A valid certificate of origin guaranteeing the lack of any pestilence and dangerous diseases which would result in quarantining such as:  1.Athergona orienlalis 2. Bactrocera dorsalis 3. Bacirocera latifrons 4. Earias viltella 5. Epilacnna Viginrioclopunciaia 6. Leucinodes oroonalis 7. Spodoplera litura 8. Tbrips palmi 9. Xanihomonas vesicaroria 10. Ceratitis capitata 11. Taphrina pruni 12. Tranzschelia pruni-spinosae 13. pseudomonas syringae pv. Morsprunorum  Disinfecting of the product at its point of origin is another condition for importing.  A hygiene certificate must be supplied to the customs at the point of entry as well. Shipments from Argentina, Turkey, Vietnam and India must be direct and in sound and proper packages. The details of the conditions can be found in the said directives.

14 January 2009

General Policies of the Fifth Development Plan Outlined

Nourlaw.com (14 January 2009) -- In Iran, long-term economic, social and cultural plans are drawn up in five-year schedules. With the Fourth National Economic, Social and Cultural Development Plan ending in 2010, the country is preparing itself for the fifth plan. For this purpose, in compliance with Principle 110 of the Constitution Law, the supreme leader of Iran, Ayatollah Seyyed Ali Khamenei, has laid down the general policies of the fifth plan to be adopted as a guideline by the parliament during the discussion and approval process of the fifth development plan legislation. The general policies, which were notified to President Mahmoud Ahmadinejad on 10 January 2009 for preparing and forwarding the bill of the fifth plan law to the parliament, consist of 45 clauses in Farsi language on different areas of science and technology, social and cultural affairs, economy, politics, security and defense. Hereunder is the translation of the section on the general policies of national economic affairs.   Economic Affairs A) Sustainable economic growth with emphasis on: 21- Materialization of continuous and accelerated economic growth equal to a minimum 8% of the annual growth rate of the gross domestic production by way of: 21/1- Expansion of investment by means of reducing the saving-investment gap by keeping the ratio of savings to gross domestic production at a minimum scale of 40% and attracting foreign sources and investments. 21/2- Realizing a one-third increase in the efficiency of economic growth at the end of the plan. 21/3- Improvement of the business environment in the country with emphasis  on the stability of the macro economy, creating the required communication, information, law, science and technology substructures, decreasing macro economic risks, continuous provision of statistics and information to the society in a transparent form and on a regular basis. 21/4- Consolidation and expansion of the national standard system.  22- Changing of the approach to the oil and gas reserves and the revenues accruing there from as a source for providing the national budget to “innovative economic resources and assets” and establishment of the National Development Fund whose articles of association would be passed by the Islamic Consultative Assembly (parliament) in the first year of the Fifth Plan and scheduling for exploitation of the comparative advantage of oil and gas in the related chain of industry, service and downstream operations, with due consideration to:  22/1- Annual remittance of at least 20% of the revenues accruing from export of oil and gas and oil products to the National Development Fund. 22/2- Extending facilities to the private, cooperative and non-governmental public sectors from the National Development Fund for the purpose of production and expansion of investment in the country and abroad with due regard to the competitive environment and achieving appropriate investment yields. 22/3- Creating mechanisms to insure the government is independent of the current expenditures from oil and gas revenues by the end of the plan.  23- Rectification of the structure of the banking system through complete and updated implementation of the Usury-free Banking Law and institutionalization of the free-interest loan system, provision of small loan facilities and the facilities required for large investments. 24- Quantitative and qualitative improvement of the financial markets (capital, money and insurance) with emphasis on efficiency, transparency and integrity of performance. 25- Materialization of the general policies of Principle 44 of the Constitution Law and the obligations relating to each part with emphasis on: 25/1- Protection of emergence of competitive markets. 25/2- Creation of proper structures for performance of the governmental tasks (policy making, guidance and supervision). 25/3- Regulating the encouragement policies for converting unorganized (family-based) activities to the juridical units. 25/4- Establishment of competitive markets for provision of medical insurance services. 26- Giving due attention to the economic, security, political and environmental value of water by expeditious exploitation, supply, conservation and consumption and channeling the waters running out from the country with priority given to using joint water sources.   27- Investment in exploitation and extraction of joint gas and oil fields and (other) mines with neighboring countries with due consideration of the general policies of Principle 44 of the Constitution Law. 28- Preservation of the strategic foreign exchange reserves to the extent that meeting of the basic needs of the country in a definite period (on the basis of the decision of the National Security Supreme Council) shall be assured. 29- Emphasis on the strategy of export development especially in high technology in a manner in which any trade balance deficiency without oil shall be decreased while a balance in trade of services would be attained. 30- Comprehensive expansion of cooperation with the countries of the southwestern region of Asia in commerce, investment and technology. 31- Improvement and coordination among the development goals: education, health and employment so that by the end of the fifth plan, the human development index shall be on par with countries enjoying high human development. 32- Changing of the budgeting system of the country to operational budgeting. 33- Making a quantitative and qualitative relation between the five year plan and annual budget with the Perspective Document* with due consideration given to transparency and efficient managerial control. B) Expansion of social justice through: 34- Regulating all the activities relating to economic growth and development on the basis of social justice and reducing the income gap extant between different sectors of society while removing the deprivation of the low-earning strata with emphasis on the following: 34/1- Compensation of unjustifiable earning inequality by means of tax policies, provision of targeted subsidies and insurance mechanisms. 34/2- Completion of the information bank relating to the two lowest-earning strata and constant updating of the same.  34/3- Insuring visible subsidies are targeted and insuring gradual targeting of invisible subsidiaries. 34/4- Insuring the public's right to the access of economic information. 35- Adopting necessary measures for compensation of the deprivation resulting from past historical periods with special attention given to: 35/1- Increasing the scale of the revenues and living standards of the villagers and farmers by drawing up rural development plans, expansion of industrial agriculture, rural industries and novel services and improvement of the pricing system of agricultural products. 35/2- Expansion of economic activities on the borders and southern shores through utilizing the capacities of the country's foreign trade. 35/3- Decreasing the income gap between the two upper and the two lower strata of the society with respect to earnings in a manner that the Gini Coefficient would reach 0/35 at maximum in the end of the Plan. 35/4- Adoption of necessary measures for setting the unemployment rate of the country at 7%.  35/5- Materialization of comprehensive and efficient insurance and quantitative and qualitative expansion of the social security system and medical insurance services. 35/6- Expansion of the preventive systems with respect to individual and social traumas. 35/7- Protection of the deprived strata and the women who are guardians of the family. 35/8- Expansion of the cooperative sector with the purpose of empowering the middle and low-earning strata so that the share of the cooperatives would equal 25% by the end of the fifth plan.    *The 20-Year Perspective Document which envisages the strategic development and progress of Iranian society in the coming years was notified on 13 Aban 1382 (4 November 2003) by the supreme leader of Iran Ayatollah Khamenei to the president, the parliament speaker and the head of the judiciary for consideration and implementation.