Extension of Deadlines for Vehicle Import Files; What Is the 1405 Quota?

The Comprehensive Trade System has extended until 30 Azar 1405 the deadline for changing the currency method of vehicle order files under the 1404 Budget Law that have not yet received foreign currency allocation. The extension, issued in response to letter No. 8807167 dated 6 Mehr 1405 from the Trade Development Organization, covers vehicle order registrations through the end of Azar.

The Comprehensive Trade System has extended the deadline for changing the currency method of car order registration files from the budget law of 1404, which have not yet been provided with currency, until December 30, 1405.

According to the announcement of the Comprehensive Trade System and following the letter No. 8807167 dated October 6, 1405 of the Iran Trade Development Organization, it is possible to change the type of foreign exchange operations of passenger car order registration files subject to paragraph "R" of Note 1 of the Budget Law of 1404 to the option of "no currency transfer" until December 30, 1405. The previous deadline for this process was set until the end of September, and now it has been extended for another three months. This decision includes the cases that were created based on the mechanism of the budget law of 1404, but have not yet been funded. Therefore, the subject of the notification is not the registration of new orders, but the continuation of the process of previous cases.

Changing the type of currency operation to "without currency transfer" does not mean the allocation of currency by the central bank. This change makes it possible to continue the process of eligible cases with the designated currency method, but it alone does not mean issuing a definitive license to import or clear the vehicle. Files must still comply with other legal requirements and permissions.

Paragraph "r" of note 1 of the budget law of 1404 required the central bank to allocate at least 2 billion euros for the import of new and used passenger cars with a maximum of five years of manufacture. According to this ruling, at least 20% of the projected resources should be allocated in each season of the year. In the text of this paragraph, the import duty of imported cars from the allocated currency was set at 100%. Also, the importation of the car from the source of the currency obtained from the export was subject to the elimination of the foreign exchange obligation of the related exporters. This law for the import of cars by Iranians living abroad also provided for the possibility of importing a car in 1404 with certain conditions, including having a residence card, without transferring currency.

However, the extension of the deadline for order registration files created based on this law does not mean determining the new car import quota for 1405. The latest announcement also does not provide an explanation about the amount of import quota this year or the resources that can be allocated for new cases.

The extension of the deadline for last year's order registration files was done in a situation where the new announcement does not provide information about the quota, foreign exchange sources and the executive mechanism of car imports in 1405. This decision in itself does not mean an increase in imports or the allocation of new currency, but it raises the need for clarification about the fate of the remaining cases. It is not clear how many cases are subject to this extension, how many of them have the possibility to continue the import process, and how many have reached the stage of providing currency or clearance. Also, the published information does not show what share of cases are related to cars with high engine volumes.

As a result, without access to the details of the cases, it cannot be said that the extension of the deadline will lead to an increase in the import of luxury cars. In order to clarify the dimensions of this decision, it is necessary to publish the statistics of the involved cases and their implementation status by the responsible authorities.

The extension of the deadline for the previous cases keeps the question about the car import program this year still raised. The Trade Development Organization and the Central Bank can clarify the implementation dimensions of this decision by announcing the number of included cases, the status of foreign exchange and the amount of cleared vehicles. Also, clarifying the quota allocation mechanism and usable resources in 1405, allows for a more accurate evaluation of the car import policy. In the current situation, what can be concluded from the announcement of the comprehensive trade system is the continuation of the process of the remaining cases from last year's budget; No announcement of new quota or general license to import luxury cars.

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