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Rouhani's Government Struggling With A New Scandal: Illegal Car Imports

In this picture taken on Friday, May 24, 2013, two Iranian women ride in a Porsche, in Noor forest, northern Iran. (AP Photo/Ebrahim Noroozi)

Iran's State Sharia Penal Authority (SSPA) says organized crime has taken place in government subsidized vehicle imports.

“A legal case has been filed against the offenders and delivered to the Public Prosecutor’s office,” the SSPA announced on July 5.

Speaking to Mizan, a website affiliated with the judiciary, the director of the SSPA in charge of preventing contraband goods and smuggled foreign currencies, Abdol Majid Ejtehadi, insisted his office was not qualified to review the case.

“Therefore, the case has been officially delivered to the Prosecutor’s office for preliminary legal investigations,” Ejtehadi said.

Nearly 6,000 foreign-made vehicles were illegally ordered between July 19 and December 30, 2017, while the Industry Ministry’s official website for registration of vehicle import requests was hacked and not functioning at the time.

Officially approved imports receive subsidized foreign currency from the state and that opens the door to various corruption schemes.

According to official figures, Iran imported 44,000 passenger cars, worth $1.18 billion, between March 21- September 22, 2017), recording a 40 percent rise in terms of value compared with the same period last year.

The figures also showed 38 percent growth in terms of number, compared with the same period the preceding year.

The head of Iran’s Trade Promotion Organization (TPO), Mojtaba Khosrotaj admitted nearly two months ago that orders for importing up to 6,000 vehicles had been illegally registered last year.

Immediately after Khosrotaj’s comments, the head of the General Inspection Organization of Iran, Nasser Seraj, maintained that the illegal orders were registered after the Industry Ministry’s official website had been “hacked.”

Nevertheless, the pro-reform daily Sharq (East) denied Seraj’s comments and insisted that the ministry's website had never been hacked.

“The mastermind behind smuggling vehicles into Iran is a former top official of the Trade Organization,” Sharq maintained, naming the suspect as "Mr. Kh."

Along with two others, Sharq reported, “Mr. Kh got access to the ministry's site and registered orders for more than 5,000 vehicles. The three, now detained and behind bars, received 50 million to 200 million rials (roughly $1,170 to $4,700) for each registration.

In Iran the names of well-connected suspects are usually withheld, both in official records and media reporting.

Meanwhile, according to Ejtehadi, out of the officially registered orders, 1,924 were illegally cleared by customs.

Iran -- Mohammad Shariatmadari, economic adviser to Ali Hosseini Khamenei, Iran supreme Leader, undated
Iran -- Mohammad Shariatmadari, economic adviser to Ali Hosseini Khamenei, Iran supreme Leader, undated

Following the publication of these figures, President Hassan Rouhani’s official site declared he had given a 15-day deadline to Trade Minister Mohammad Shariatmadari, to publish the full list of car importers who have received cheap foreign currency from the state.

The minister, once reluctant to publish the list of people and companies involved in illegally importing vehicles to the country, was forced on July 4 to appoint a committee to “investigate” the case.

Shariatmadari had earlier argued that publishing the names of car importers would be equal to a public “war against the private sector."

In the meantime, Iran’s Central Bank on July 1 published the names of 1,500 companies and individuals who received millions of dollars at the government rate of 42,000 rials and mostly offered their goods at the free market rate, which is almost double (on the free market, one dollar is offered for 83,000 rials).

Infographic Chart - Rial Problems
Infographic Chart - Rial Problems

The published list includes some weird entries, Radio Farda reported. For example, a “soccer club” in Hormozgan Province in southern Iran received more than $2.5 million “to import car tires."

Information Minister Mohammad Javad Azari Jahromi also announced on June 25 that his government had provided several companies 220 million euros (roughly $250 million) at the government rate (42,000 rials) to import cell phones, but less than one-third of it was used for the intended purpose. The rest was used to sell a myriad of goods at local markets, priced on the basis of the black market dollar value (almost 80,000 rials).

According to published official records, Iranian entities and individuals seem to have systematically misused subsidized foreign currency provided by the government for importing a myriad of “popular” goods.