Legal Newsletter

12 November 2016
New Rules Set for import and export of Forex by Passengers  and Transit Drivers November 2016- In a recent circular letter the Central Bank of the Islamic Republic of Iran (CBI) has set out conditions for the export and import of foreign currencies by passengers and drivers transporting transit goods.

According to the CBI decree, titled” The Executive Instruction for the Rules Applying to the Foreign Currencies Held by Passengers”, effective as from 1/9/1395 (21 November 2016), import of USD up to a ceiling of 10,000 or its equivalent in other foreign currencies, is allowed without declaration to the customs entry points. Any larger sum requires an inquiry from the Center for Financial Intelligence and Combating Money Laundering of the Ministry of Economic Affairs and Finance (FIU).

Any passenger in possession of more than USD 10,000 must declare the additional amount and deposit the same with the related Branch of Bank Melli stationed at all customs entry points against receipt of a tracking code. Upon confirmation of the FIU, the additional amount will be returned to the passenger or at the discretion of the passenger, will be transferred to the bank account he/she determines or seeks the Rial equivalent of the said amount.

Passengers who have already declared amounts exceeding USD 10,000 before the effective date of the CBI decree (21 November 2016), should refer within six months to the Customs Information Base to register their respective information and receive their tracking code.

The above rules also apply to duly licensed drivers transporting commercial goods through Iran. The FIU branches are centralized units of the national agencies responsible for detecting and fighting the financing of terrorism and money laundering.

12 November 2016
Iran Signs Agreement on Veterinary and Husbandry Health with  Republic of Azerbaijan November 2016- The Official Gazette published today “The Law of Cooperation Agreement in the Field of Veterinary and Livestock Health between The Islamic Republic of Iran and Republic of Azarbaijan States”. The legislation was passed by the Iranian Parliament on 4/7/1395 (25 September 2016).

According to Article 1 of the agreement, its scope of action includes bilateral cooperation for guaranteeing preventive controls, elimination and upgrading the supervision and vigilance respecting the spread of disease in land-based and aquatic animals and facilitation of trade in goods related to the aforesaid animals.

10 October 2016
Decree on Visa Procedures for Foreign Nationals in Free Zones October 2016- The Iran Official Gazette in its issue No. 20854 dated 19/7/1395 (10 October 2016) published Decree No. H52602T/161205 dated 8/12/1394 (2 March 2016) passed by the Iranian Council of Ministers respecting the issue of entry visas for foreign nationals in the free trade and industrial zones. Excerpts follow:

– In this Decree the Host of foreign nationals means governmental or private holders of economic corporations and development, construction, production, industrial, service, medical, recreational and touristic projects, as well as other natural and juridical persons.

Public Places refers to hotels, motels, hostels, dormitories and private places including guest houses of private companies and homes of the individuals who are authorized for hosting the travelers.

– The police stationed at the entry points of the free zones shall issue and stamp the residence permit on the valid travel documents of foreign nationals. The validity duration of the permit is one month. However, upon the request of the Host and approval of the free zone authority, it can be extended for six months. It is also renewable for an additional six month period. For the residence of foreign nationals investing in the free zones, a residence permit of one to five years can be issued at the discretion of the related free zone authority.

– For the following persons, a residence permit shall not be issued:

A) Citizens of the countries whose entry has been banned by the government of Iran.

B) Those who are not allowed to enter the country on the order of judicial and security authorities.

C) Those who are not allowed to enter the free zones on the order of judicial and security authorities.

– Foreign nationals, in addition to the entry points of the  free zones, can use

other entry points for accessing and leaving the free zones. For that, the Iranian consulates in foreign countries or domestic representatives of the Ministry of Foreign Affairs, or the representatives of police at the designated points (with prior permission of the Ministry of Foreign Affairs) will issue a visa valid for one month. Extension of the residence of such foreign nationals is possible in line with the manner described above. Upon the request  of the foreign national and at the discretion of the Ministry of Foreign Affairs,  issuance of a visa and residence permit on separate forms is allowed. In order for them to exit through the mainland, the representative office of the Ministry of Foreign Affairs in the free zone shall issue the related visa for entering mainland Iran.

-Foreign nationals who have entered the free zones and wish to travel to the mainland, should obtain an entry visa from the Ministry of Foreign Affairs’ representative office in the free zone. The visa would be issued within 48 hours.

– Foreign nationals residing in the mainland and having a valid visa, will not need a separate visa for entering the free zones. They may travel to the free zones by presenting their residence permit and a valid visa.

– Foreign nationals working on Iranian oil and gas installations located outside the authorized water limit of the free zones (800 meters) should obtain their valid visa from the Iranian consulates abroad or the representative offices of the Ministry of Foreign Affairs in the free zones or provincial capitals.

– Managers of public and private places are obliged to inform the alien affairs section of the police of the free zone, concerning the particulars of the identity and the date of entry of foreign nationals to the zones.

– Employment of foreign nationals shall be subject to the free zones’ regulations pertaining to labor, social security and insurance.

8 October 2016
Import of Some Second hand Goods Disallowed 8 October 2016- The Trade Promotion Organization of Iran (TPO) in its circular letter  No. 95/210/44253 dated 17/07/1395 (8 October 2016) has disallowed applying for the import of second hand goods which are subject to standard regulations. TPO‘s decree is based on the resolution of the Committee which according to Article 1 of the by-law of the Export and Import Regulations Act, has been charged with supervision and drafting suggestions regarding export and import of goods and services. TPO notes in its circular that according to the declaration of the National Standard Organization of Iran (a.k.a ISIRI), a thorough examination of the standard qualifications of the group of imported second-hand goods which are subject to a set of compulsory criteria, is impossible of achievement.
6 October 2016
Iran Welcomes Amendments of International Convention for the Safety of Life at Sea (SOLAS) 6 October 2016- The Iranian Official Gazette in today’s issue  published the full text of the Law of Approval of Amendments to the International Convention for the Safety of Life at Sea (SOLAS), passed by the Iranian parliament on 31 August 2016.The Islamic Republic of Iran acceded to the convention on 17 May 1994.

The SOLAS Convention in its successive forms is generally regarded as the most important of all international treaties concerning the safety of merchant ships. The convention has been updated and amended on numerous occasions. The convention in force today is sometimes referred to as SOLAS, 1974.

5 October 2016
Tax Criminalization in Iran October 2016- The website of the Tax Affairs Organization published a short Farsi language article on tax criminalization in Iran today. Our English translation of excerpts of that item is as follows:

Prevention of non-abidance of the law is a subject of great significance in all countries and Iran is no exception to this rule. One of the essential matters in the realm of tax law, are tax violations such as tax evasion that carry particular weight and efforts to combat this phenomenon are unstinting, as far as is possible, by passing preventive legislation.

In the Direct Taxation Act of Iran, tax violations such as tax evasion were dealt with in a non-criminal manner in the past and cash fines were imposed to prevent such actions. But, with the passing of the Amendment of the Direct Taxation Act in August of 2015, the perpetrators of tax offenses shall be sentenced, in addition to cash fines, to penal punishment set out in Articles 274 to 279 of the act.

According to Article 274 of the act, tax violations such as concealing economic activities and hiding accrued revenue, presenting falsified statutory books, statements and documents as evidence of ongoing business and using the Commercial Card of other persons for tax evasion, are now considered a crime. The perpetrators (as stipulated in Article 275) shall be subject to Grade Six Punishment (i.e., imprisonment ranging from six months to two years, deprivation of social civil rights for a period of six months to five years etc.).

In cases wherein tax violations are committed by a juridical entity, the company may be prohibited from transacting certain businesses or issuance of certain commercial instruments. In addition to the said punishment, the perpetrators of tax offenses shall be held liable for payment of the principal tax plus the applicable cash penalties, including the damages inflicted upon the government in accordance with the courts’ ruling.

In the amendment of the tax act, the violations which might be committed by tax offices have also been the focus of attention and according to Article 279, any unauthorized access to and misuse of the information registered in the tax data base relating to the identity, performance and assets of the tax payers for purposes other than assessing and collection of taxes and also disclosure of the information of tax payers is considered a crime. The perpetrator of such crime, in addition to being deprived of governmental and public services for two to five years, shall be sentenced to imprisonment ranging from six months to two years.

27 September 2016
Entry from Iran to the Republic of Azerbaijan by cars lacking Euro 4 standards or manufactured before 2010 banned 27 September 2016- Iran Customs in its circular letter No.122470/237 has notified that according to the information received from the Ministry of Foreign Affairs and the Iranian Embassy in Baku, the government of the Republic of Azerbaijan has banned the entry of vehicles lacking Euro 4 standards  (European toxic emissions limit of vehicles) or those manufactured before 2010. In the circular it is noted that the ban should be duly considered in issuing permits for temporary exit of vehicles to the Republic of Azabaijan or exporting cars from Iran to that country.