The money was brought back to the country as per the existing currency repatriation rules mandated by the CBI. Rules include selling currency on Nima (Integrated Forex Deals System), cash transfers through hawalah, selling to the bureaux exchanges, and using the currency for imports. Currency repatriation can also be undertaken through import of goods and machinery either by the exporting company itself or a third party.
Nima is the platform where exporters sell their currency earnings to importers of non-essential goods.
The amount mentioned above excludes earnings of last winter because the CBI program does not say anything about the deadline for the winter revenue, Financial Tribune reported.
This is while earlier reports said of the $40 billion in non-oil exports last year, a quarter of the amount was repatriated.
Currency repatriation has become a major bone of contention between the CBI and private companies in recent months due to the new US oil sanctions that have impacted the government’s hard currency revenues.
Hemmati has often complained about exporters’ refusal to repatriate their export earnings saying if they do so the CBI no longer would have to spend its own scarce resources, particularly at a time the country’s oil revenues have shrunk due to the new US sanctions on Iran’s oil exports.
There is a huge difference between the Nima and free market rates, the latter being much higher. This is said to be the primary reason why manufactures and businesses in the export sector are averse to bringing their money back home.
The CBI earlier warned that traders who don’t fulfill their currency repatriation obligations will face prosecution.
In a recent meeting with exporters and business leaders, Hemmati talked about a “major overhaul in repatriation of forex earnings of exporters” in the near future.
ICCIMA Proposals
In a meeting last week the CBI chief and members of presiding board of Iran Chamber of Commerce, Industries, Mines, and Agriculture discussed revisiting currency repatriation mechanisms to remove hurdles to foreign trade.
The ICCIMA chief proposed reforms to foreign exchange policies n the key non-oil export sector.
The proposals, sent in letter to the CBI boss, involves guidelines related to deadlines set by the CBI for repatriating currency earnings and revising tax exemptions to exporters who fulfill their currency commitments.
According to the ICCIMA news website, Gholamhossein Shafeie urged the CBI to extend the currency repatriation deadline from the current three months to six.
Likewise, he proposed the deadline for carpet and handicraft exports be extended to one year and for other products nine months.
Shafeie proposed that the deadline for repatriating earnings of exported goods (except for petrochemicals and natural gas condensate) during the past fiscal be extended to late September.
He called on CBI to exercise its authority and send the names of exporters who fail to meet their currency repatriation commitments to the Iranian National Tax Administration. It is worth mentioning that as part of the incentive package offered to exporters, INTA has announced tax exemption for law-abiding companies.
In a bid to encourage companies to return their export earnings, the CBI offered new incentives in February allowing them to sell a portion of their forex to exchange bureaux in cash or hawala instead of selling the whole amount via Nima.