August 19, 2016
Flip-flopping on an earlier threat to confiscate Apple phones in Iran, the government is now planning to authorize imports of the phones.
The issue for some is rampant smuggling of iPhones into Iran. The government is stumbling as it tries to figure out how to cope with the problem—and the lost income from tariffs.
Last month, it demanded that Apple immediately register a retail store in Iran, and said it would confiscate Apple phones already in the country if Apple didn’t set up a legitimate business inside Iran.
Apple just ignored the Islamic Republic. A month has passed. Nothing happened. Now, the Islamic Republic has come up with a different policy.
The Trade Ministry is requesting that the country’s Trade Promotion Organization issue licenses for nine importers to market iPhones, the Tasnim news agency reported.
Despite prohibitions, iPhones are believed to be relatively common in the country, at least among younger and wealthier people. The government largely ignored the issue until two months ago, when it began a crackdown that has since backfired and pushed up prices.
The US currently forbids iPhone sales directly to Iran, but it isn’t hard for merchants in Iran to buy them from third parties, mainly in the UAE.
In mid-July, the Islamic Republic gave Apple “a few days” in which to register a store in Iran or see all the Apple phones in Iran confiscated.
Apart from the fact that it is impossible to register a business in Iran in “a few days,” the order was nonsensical.
For one thing, under sanctions, Apple cannot do business in Iran. The Obama Administration wants to encourage the sale of communications gear in Iran that would make it easier for Iranians to get around state censorship and might be willing to license Apple to open a store. But the license would have to come from the Treasury Department’s Office of Foreign Assets Control (OFAC), whose slothful activities make the Iranian bureaucracy look like Speedy Gonzales.
As for the threat to confiscate the millions of Apple phones that have been brought into Iran in recent years, that was greeted by many Iranians as laughable.
Apple would like to have stores in Iran. The Financial Tribune says it had lawyers looking into that possibility years ago, but nothing came of it.
The outstanding question is: Why did the Islamic Republic even issue its ultimatum to Apple?
The regime said the demand was a bid to end the loss of tax revenue from millions of iPhones smuggled into Iran. But the International Campaign for Human Rights in Iran (ICHRI) says the real goal was to break through the wall of US sanctions.
“If [Apple] does not register an official representative office in Iran, all phones produced by this company will be confiscated from stores,” said Abbas Nakhaei, head of the Anti-Smuggling Task Force, in an interview with the Tasnim news agency on July 17, the day the ultimatum was issued.
The iPhone is popular among Iranians, with an estimated six million active users according to a July 20 report in the daily Donya-e Eqtesad. But the phones are largely brought illegally from Dubai.
The bigger goal is to break through the barriers preventing US companies from entering Iran, ICHRI argued. If Apple resolves the technical and legal issues preventing US investment in Iran and comes, Tehran calculates others will follow.
But Apple would get a special license to open a store—just as Boeing has received a special license to talk about plane sales with Iran. Neither license opens doors for others.
In the month since the ultimatum was issued, Apple has not risen to the bait. And the police have not been reported grabbing up iPhones.
In sum, it just sounds like another of the many hollow threats that have been made by non-thinking officials of the Islamic Republic—and of the Pahlavi Dynasty before it.
In addition to the ultimatum to Apple, Iran’s Anti-Smuggling Task Force said all iPhone users in Iran must register their phones within the next few weeks. Every mobile phone has a unique International Mobile Equipment Identity (IMEI) number. If iPhone owners do not register that number by September 22, the authorities said they would cut service to their phones.
However, there is often a disconnect in Iran between those making policy and those charged with its implementation. And that has arisen here.
One week after the registration order was proclaimed, the Telecommunications Ministry announced a delay in registering cellphones due to a lack of preparation.
The government attempted to require all mobile phone owners to register their phones in 2006 to combat smuggling, but “it did not succeed because mobile operators refused to cooperate,””said Alireza Golestani, the deputy head of the Central Taskforce to Combat Smuggling of Commodities and Foreign Exchange.
A retailer in Tehran who sells Apple phones told ICHRI that since the ultimatum to Apple, the price of iPhones has increased about 10 percent.
