Appropriate Policies and Strategies in the Field of Imports Under Intensified, Reduced or Eliminated Sanctions

Dr. Alireza Garshasbi 

The imports of goods and services have a critical role in continuing production, market regulation, and exports in Iran. Facilitation of imports, therefore, decreases economic costs of the country. The intensification of economic sanctions in the period 2010-2012 reduced oil revenues and stopped services related to trade. The Central Bank of Iran was also sanctioned. The result was a shortage of foreign exchange supplies, an increase in foreign exchange rates, reduction of imports, increased transaction cost of imported goods, increased impediments on importation and increased prices in the market. Fluctuation in exchange rates can be considered as an important result of the sanctions.
In 2012, a period of intensified sanctions, the establishment of the Foreign Exchange Transactions Center and allocating foreign exchange to imports based on a ten-category classification system of imported goods which have a great amount effects on import were the most important and the most effective general policy of the Government to counter the sanctions. Our investigations indicated that the delay in establishing the Foreign Exchange Transactions Center, the failure of state companies affiliated to the  Ministry of Petroleum  and of the National Development Fund to supply foreign currency to the Center, the lack of identification criteria in similar conditions, interruptions in the supply of more demanded foreign currencies, difficulties in scheduling the process of receiving the foreign currency, lack of a foreign exchange transfer system at the Center and the absence of a mechanism for price discovery were among the major problems facing the Center.
Potentially, sanctions might be tightened, loosened or even canceled in the future. According to the results, it is suggested that if the sanctions are intensified, the Foreign Exchange Transactions Center allocate foreign currency only to staples and to high-risk production activities. Further, the Foreign Exchange Demand and Supply Desk must be set up in order to finance imports by foreign exchange earned through exports. Also, there shall be no import prohibitions. In case the sanctions mitigate, the Foreign Exchange Transactions Center must be eliminated and an exchange futures market established. The ten-fold categorization of priority goods must be abolished. If the sanctions are canceled, effort shall be made to join the WTO and to implement Resistance Economy related programs. 


International Sanctions, Foreign Exchange, Foreign Exchange Transactions Center.

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