Iran bans 'luxury' imports as sanctions bite

Associated Press Modified: November 8, 2012 at 2:46 pm •  Published: November 8, 2012
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President Barack Obama has strongly favored a combination of sanctions and diplomacy to try to wrest concessions from Iran. In Paris last week, French President Francois Hollande said his country would favor as many sanctions "as necessary" to rein in Iran's nuclear ambitions, which the West and allies fear could lead to atomic weapons. Iran says it only seeks reactors for energy and medical research.

It's unlikely that squeezing consumer choices will be enough to touch off major street protests, which would certainly be met by swift crackdowns. But the steps could directly affect Tehran's main bazaar, which acts as a clearing house for many imported products. In early October, many bazaar merchants staged a rare strike after the Iranian currency, the rial, plummeted more than 40 percent in value in the span of a few months.

A Commerce Ministry official, Sasan Khodaei, was quoted by the IRAN newspaper as saying the reason for the import ban was to keep Iran's foreign currency within its borders, as part of a so-called "resistance economy" to try to ride out sanctions.

"Last year the amount of import of luxury goods was about $4 billion. By stopping permits on them there will be a remarkable saving of hard currency," said Khodaei, who also predicted that some items on the current banned list, such as laptops and cellphones, could be removed eventually because there may not be enough domestic production to meet demand.

With 75 million people and a highly developed middle class, Iran has long been one of the major consumer markets in the Middle East. Nearly every major foreign brand — Coca-Cola Co., Samsung Electronics, Panasonic — make their way to Iran through local subsidiaries or assembly plants. Other products such as Apple iPads arrive via black market routes from Turkey, the Caspian Sea or across the Persian Gulf.

Critics say the new bans will only boost smuggling, which now comprises $15 billion worth of goods annually, according to some estimates. That's more than three times the import of "luxury" goods cited by the Commerce Ministry.

"People will find a way to smuggle in what the Iranian consumer wants," said Boroujerdi. "They always have."

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Murphy reported from Dubai, United Arab Emirates.