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KEY
FEATURES OF TRADE AND EXCHANGE SYSTEM
The
currency of the Islamic Republic of Iran is the Iranian Rial, and
the exchange system is based on a dual exchange rate structure:
a:
The "oil-notional" rate is fixed at Rls. 1,750 per US$, which applies
to part of oil and gas export receipts, which is allocated to imports
of essential goods and services, debt services, and imports related
to large national projects.
b:
The "non-oil export" rate, which is applied to non-oil exports receipts
and imports of goods and services and other transactions which are
not carried out at oil-notional rate. All non-oil exporters are
granted the right to deposit their foreign exchange proceeds with
banks and receive certificate of deposits (CD).The CDs could be
traded on the Tehran Stock Exchange(TSE),sold directly to agent
banks within three months of the issuance of CDs or used for opening
LCs for import purposes. The non-oil export rate is the rate of
certificate of deposit being traded on the TSE. It should be noted
that since the beginning of the 3rd FYDP (2000/01-2004/05), the
export rate at Rls. 3,000 per US$ was eliminated.
The
authority for foreign exchange policy and regulation is vested with
Bank Markazi Jomhouri Islami Iran. All foreign exchange transactions
must take place through the banking system.
Imports
and exports are governed by regulations issued periodically by the
Ministry of Commerce after approval by the Cabinet. According to
these regulations, import goods are divided into "authorized", "conditional"
and "prohibited" goods. "Authorized" goods require no special license
or permits for importation, while importation of "conditional" goods
requires licensing by respective authorities. "Prohibited" goods
are those, which are forbidden by Islamic Sharia, or respective
laws. But it should be noted that in view of elimination of certification
procedures
for almost all import items, the number of goods under conditional
categories reduced to a minimum.
All
imports are subject to import advance payments. The minimum import
advance payments is 10 percent. Most imports are subject to duties
including commercial benefit tax. The commercial benefit tax rates
are specified in the Export-Import Regulations by the authorities
each year.
Persons
needing medical treatment abroad may obtain foreign exchange at
the CD rate upto the amount specified by the High Council of Health.In
case the allocated amount does not fully cover the expenses,the
balance could be allocated at negotiated rate.Foreign exchange allowances
are provided for students holding fellowships at oil-notional rate
by the relevant authorities granting fellowships. For other students
studying abroad foreign exchange will be allocated at CD rate.
Iranian
nationals travelling abroad may purchase upto 2,000 US dollars at
negotiated rate for three travels in each year. Every accompanying
person (over 12 years) in-group passports, is eligible to purchase
upto maximum of US$1000 per person, at the negotiated rate, for
maximum of four persons.
Iranian
nationals and foreigners are allowed to hold interest bearing foreign
exchange deposits with authorized domestic banks. Two types of foreign
exchange deposits are permitted, i.e. foreign exchange deposits
of "external origin", and foreign exchange deposits of "domestic
origin". Foreign exchange with external origin could be traded at
negotiated rate. Balances of the foreign exchange deposits of "external
origin" may be taken out of the country freely. Maximum interest
rate payable on foreign exchange time deposits is LIBOR plus one
percentage point.
There
is no limit on the amount of foreign exchange that travelers may
bring into the country. However, for the purpose of repatriation,
the amount must be declared at the time of entry. Iranian travelers
leaving the country must pay an exit fee of Rls. 70,000.
Foreign
investment in Iran is allowed. The right for repatriation of principal
and dividends is guaranteed if the investment is made under the
1955 Law for the Attraction and Protection of Foreign Investment.
As for portfolio investment, non-residents may invest in instruments
traded on the Tehran Stock Exchange.
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