“Owners of such [rented] cards are not exporters per se… the cards are usually abused”, Jafar Sarqeini was quoted as saying by IRNA.
Also called ‘single-use commercial cards’, renting commercial cards is often criticized by many quarters due to its potential for abuse and its negative impact on foreign trade and forex rules.
Firms using hired commercial cards and neophyte exporters have been blamed for the rampant failure to repatriate overseas earnings. Many argue that credible traders are less likely to breach rules guiding forex repatriation.
Banking and trade officials say of the $72 billion revenue generated from non-oil export in the past two years, $27 billion has not returned home.
“Use of such cards has created many hurdles to returning export earnings,” Sarqeini told reporters on the sidelines of a Cabinet meeting on Wednesday.
The official announced that new procedures will be adopted, based on which commercial cards will be issued based on a credit-ranking system. He did not elaborate.
One way to overcome the problem is to place a cap on the amount new exporters can handle. They can export a limited amount of goods with their special commercial cards for the first time to demonstrate that they are capable of fulfilling their financial commitments on time.
Earlier in July, the Central Bank of Iran announced a package of export earning repatriation rules based on which the Ministry of Industries will rank exporters credibility and past commercial performance, and if needed impose restrictions on how much they can export.
Oversight
Accordingly, the ministry will also monitor foreign trade conducted with commercial cards. The move led to the drafting of a bylaw by the Trade Promotion Organization in August.
The bylaw set limits on export by owners of new commercial cards. Exporters who got their commercial cards recently can export not more than $500,000 during the first year of their activity.
Likewise, new export companies can send abroad goods worth $2 million in the second year. Manufactures that export are exempt from the rules.
The decision was made in consultation with the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) to promote the export sector and improve repatriation of export earnings.
Onus on TPO
In order for the government to better monitor the process of issuing commercial ID cards, the responsibility was transferred from the ICCIMA to TPO two months ago.
The move has reportedly led to traders’ dissatisfaction due to flaws in the TPO platform, drawing criticism that the decision was made in haste without first preparing the infrastructure.
The flaws are apparently related mainly to procedural issues as exporters complain that they have not been able to receive or extend the validity of their commercial cards after the new system was announced.
Alireza Azizi, an official with the Mashhad Chamber of Commerce, told ICCIMA’s news service that only one manufacturing company has been able to renew its commercial card in the past 50 days “albeit after an arduous process”.
Addressing the issue, Sarqeini said that both ICCIMA and TPO’s platforms for now will work in tandem to correct flaws in the new system.