A Handy Insight to Iran Import and Customs Law

Iran will now be able to trade more freely with the rest of the world. This offers Foreign companies an opportunity to engage in the biggest new market to re-enter the global economy in decades.
Trade, in its specific term, however requires a general awareness of Iran legal regime regarding import and export.
All the procedure of export and import of goods and related service should follow the “Export – Import Regulations Act” enacted 26 September, 1993. According to this law, Exportable and importable goods are classified into three categories :
1. Permissible goods: those good than, subject to observation guidlines, can be imported to or exported from Iran without any need to obtain license.
2. Conditional goods: the exportation or importation of these goods is possible only by acquirement of a license .
3. Prohibited goods : the exportation or importation of these goods (purchase, sale or consumption ) is forbidden under the law.
As a general rule, engagement in the business of exportation and importation of goods for commercial purposes, requires a commercial card which shall be issued by Iran Chamber of Commerce, Industries and Mines and approved by the Ministry of Commerce. Therefore
For the purpose of this guideline, then we shall differentiate between importing goods to Iran or exportation from Iran to other countries.
Besides, it shall be reminded that the process of importation and exportation has many different aspects which might fall under other legal areas such as banking law, contract law, etc. Here we mainly focus on licenses and custom issues.

The Initial Requirement for Importing Products into the Iranian Market

Foreign companies, which intend to import and sell their products directly into the Iranian market (not through a local company which may serve as their agent) need to establish a branch (See our Article on “Registration of Branch in Iran by Foreign Companies”).
As an alternative, they might decide to establish a Iranian Company (100% owned by foreign stakeholders- in this regard see our article on “Establishment of Companies 100% Owned by Foreign Companies”)
For the import of goods into Iran, import license and commercial card are required. The commercial card is issued by the Iran Chamber of Commerce, Industries and Mines. With regards to the import license, the foreign importer is required to register its order before the Ministry of Industry, Mine and Trade and shall obtain the respective import license.

The Manner of Importation of Foreign Products

Required Documents

Before authorizing the import, the Ministry will examine if the merchandise is on the list of permitted import merchandise. The Iranian import regulations differentiate between:
“Authorized Goods”, which may be imported in accordance with the general regulations (i.e. industry equipment and machines),
“Conditional Goods”, which are subject to special conditions (i.e. cosmetics, food and medicines), and
“Prohibited Goods”, which may not be imported according to Iranian law or which come from Israel.
The government can exclude products classed as “not necessary” (because they are sufficiently available from in-house production) from importing altogether. Goods produced in the country are not issued an import permit. If the national demand exceeds the local production, an import permit may be issued as an exception at the request of the importer. The following documents are required for registration of a product order:
• Valid Commercial Card;
• Membership Card of Ministry of Industry, Mine and Trade;
• The completed Product Order Form;
• The original copy of Performa;
• Catalogue and booklet and material analysis for some specific products.

In case the products are ordered and/or purchased by the governmental bodies, the following documents are required:
• The written approval of the respective governmental body;
• The written request of the governmental body;
• The copy of the purchase contract;
• Invoice;
• The copy of B/L (Bill of Lading) and warehouse receipt.

After registration of the product order before the Ministry of Industry, Mine and Trade, a L/C (Letter of Credit) should be opened. After that, the products will be forwarded by courier to Iran and upon their arrival to the Customs, the procedures for customs clearance should be followed.
The following documents are required for clearance of the products from the Customs:
• The Product Order Form;
• Completing the Customs Declaration;
• Shipping Documents (Invoice, B/L, Packing List, Certificate of Origin, Certificate of Inspection);
• Commercial Card;
• Warehouse Receipt;
• Clearance Certificate (This certificate is issued by the courier or forwarder showing there is no outstanding payment between the product owner and the courier.);
• L/C.

Customs Duties and Interests

Importation of goods to Iran, if not falling under prohibited or conditional goods, are mainly subject to custom duties and interests. Custom duty is determined by Legislator to be 4% for all goods. Custom interests, on the other site, mainly serve as a policy recourse for government to support or deter importation of certain goods to Iran territory. Custom interests are announced at the beginning of each Iranian year and will be applicable for a course of one year. You can see custom duties for 1395 (2016-7) here.
Iran follows the self-declaration system in calculation of customs duties that shall be levied to imported goods. Besides, where a contract exists, the CIF price plus all costs related to opening L/C and other related costs incurred until the receipt of goods to the first custom office, is considered to be the value of good.
However, in certain cases, such as in case where there are signs of fraud, value of goods will be reassessed by Customs Office.
The process of custom clearance are mostly delegated to authorized clearance agents.