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Please be informed that Circular No. 60/1217 dated 9/11/1373 (January 29, 1995) which indicates that a guarantee must be possed for the import of foreign exchange derived from non-oil exports, has been rectified as outlined below. The superseding regulations and relevant forms are enclosed. You are hereby instructed to urgently inform your branches of the new regulations and ensure that they are enforced accordingly.

• 1- You are authorized to print guarantee letter forms in five different color copies, numbered consecutively from 1 to 5, and bearing serial number. These forms must be put at the disposal of your branches.
• 2- Part "A" of all copies of the guarantee letter form must be completely filled out and signed by the exporter.
• 3- Part "B" must be filled out by the relevant bank after ascertaining the identity of the exporter. The fifth copy to be retained by the Bank and copies one through four to be returned to the exporter for presentation to Customs.
• 4- Customs House processing the customs formalities should insert the relevant information in part "C" of all four copies of the Form and certify the correctness of the particulars and figures indicated on the Form.

• 5- Having completed the export formalities and secured the Customs certification on the copies of the Guarantee From, the Exporter is obliged to submit the documents to the involved bank.

• 6- Guarantee Letter is not necessary for goods exported to Middle Asian Countries (Azerbaijan, Georgia, Armenia, Turkmenistan, Uzbekistan, Kirghizia, Tajikistan, Kazakhstan, Russia, Belo-Russia, Ukraine, Moldavia).

On the strength of the Export Declaration Form, exporters to the above countries may personally import commodities or delegate their privilege to others or they may sell the foreign exchange to banks provided that the foreign exchange is of foreign origin and obtained within the context of this circular. Otherwise, within the one year life period of the Export Declaration Form, the exporter, against his exports to any of the above countries, may import goods from the relevant country or any other country named above.

• 1- Having deposited any amount of foreign exchange originating from abroad with your local or foreign branches, and after such amounts are deposited in the account of your correspondent bank abroad, the exporter can request your bank to issue Deposit Certificate. The format of the relevant form and the procedure for its issuance are outlined in Item "E" of this Circular.
• 2- Within maximum four months from the date of issuance of Deposit Certificate, the exporter either directly or through another authorized importer may import permissible goods, provided that Ministry of Commerce's Import Registration Certificate and Foreign Exchange Allocation Guarantee Letter (enclosed form which must be issued by the relevant bank) are presented to the bank.

• 3- If the beneficiary of the deposit certificate fails to make use of his privilege within four months from the date of the certificate issuance then he must sell to the bank, at the day's rate of exchange, the deposited amount. If the beneficiary fails to contact the bank, then the bank would convert the amount of the Deposit Certificate into local currency at the day's rate of exchange and place it in the Temporary Creditors Account of the bank until such time that the beneficiary contacts the bank.
• 4- Only the issuing bank of the deposit certificate subject of item 1 can transfer it to other qualified importers.
• 5- For the sake of expediting import formalities, the concerned bank at the request of the importer who would submit the Ministry of Commerce's authorization and other relevant documents, must take the necessary action to meet the demand of the importer. The bank then, through its International/Foreign Affairs Department, must send all documents along with a general summary to the Central Bank for registration of statistics relating to issuance of deposit certificates. Repeated extension and amendment of documentary credits relating to imports is allowed.
• 6- Importers who import goods against Deposit Certificates are obliged to present to the concerned bank the Customs' Green Permit within the specified period.
• 7- The exporter may use the rest of the foreign exchange amount of the undertaking letter (the second 50 percent), obtained through export, to import goods within the framework specified in this Circular. To do so, the involved exporter must deposit the foreign exchange required for import with one of the local banks, their overseas branches or foreign banks. Obviously, transactions relating to required amounts between the domestic and foreign banks must be arranged in such a way as to enable the domestic banks to secure the foreign exchange amount required for imports from the foreign banks.

Note: The customs clearance of the goods imported through a Deposit Guarantee in accordance with Item 3- 7 of Circular Nol 1035 dated 18/3/73 (June 8/94) is conditional on the importer being in possession of Foreign Exchange Securing Certificate.

Exporters who had exported goods prior to 15/11/73 (2-4-95) when such exports did not require the posting of foreign exchange guarantees may adopt one of the following two methods for importing goods:

• 1- Direct import by the exporter within one year from the date of issuance of the Export Permit and within the context of Circulars No. 60/1021 dated 31/1/73 (20-4-94), No. H/1035 dated 18/3/73 (8-6-94) and No.60/1072 dated 15/4/73 (7-6-94).
• 2- Through depositing in a bank any amount of foreign exchange of foreign origin plus up to 100 percent of the amount of the export permit. Additionally a certificate must be submitted to the effect that such amounts have been deposited with a bank and that the amounts are transferable to others during a period of four months from the date of issuance of the Certificate as specified in Item 2-B of this Circular. In this case the presentation of foreign exchange and the securing of the deposit certificate (valid for one year from the date of issue of the Certificate) also applies.

Not: Banks which issue Certificates of Deposit against Export Declaration Forms issued prior to 15/11/73 (2-4-95) as well as prior to and after 15/11/73 (2-4-95) for Middle Asian States, they must stamp the Export Declaration Forms with a stamp having the following notation: "The amount of ...... has been used for import on the strength of Purchase Order Permit issued by the Ministry of Commerce". The purpose of such notation is to prevent the owner of the Purchase Order Permit from repeated use for import of the amount of the Purchase Order Permit.

• 1- Exporters are obliged to inform the bank about the amount of foreign exchange stated in their Guarantee Letter. Failing to do so within the period specified in the Guarantee Letter, deprives the exporter from the privilege of imports. And at any rate the exporter, at the expiry date of the Guarantee Letter, must sell the foreign exchange stated on the Guarantee Letter to the involved bank. Otherwise, the bank should take legal action against such an exporter.
• 2- In cases the bank is informed that the goods are exported on Documentary Credit basis, and the date of payment is beyond the date specified in the Guarantee Letter , then the period for informing the bank about the foreign exchange would be in accordance with the conditions of the credit and the date of the Deposit Guarantee would be the maturity date.
• 3- The first copy of the Guarantee Letter (filled out and certified by the customs), must be presented by the exporter to the branch of the bank which is the receiver of the Guarantee Letter. Should the exporter fail to do so, the concerned branch, through its International/Foreign Department, must enquire from the customs as to why the copy of the Guarantee Letter was not submitted to the bank in accordance with Item 2-A of the Circular, and whether or not the subject goods were exported. Should it become evident that the goods were exported but the foreign exchange was not cleared, then steps should be taken in accordance with the conditions indicated on the reverse side of the Guarantee Letter.
• 4- Exporters exporting goods to members of Barter Agreement of Asian Countries may use the total foreign exchange value of their exports to import goods from those States or sell the foreign exchange to the bank.
• 5- As per this Circular no import is allowed prior to export.
• 6- In the case of a hard currency of foreign origin is declared to a bank as a pre-export foreign exchange, its use for this purpose would be dependent on having the amount deposited in the bank's temporary creditors account until such time that the beneficiary exports some commodity. The bank would then issue Deposit Certificate in favor of the beneficiary. This Deposit Certificate would be issued by the bank against the securing of foreign exchange guarantee letter from the beneficiary.
• 7- It should be emphasized that Foreign Exchange Guarantee Letters could only be used for import by a party against a remittance in the name of the guaranteeing party or against hard currency of foreign origin from his own foreign exchange account. Utilizing foreign exchange remitted in the form of a draft in the name of other persons or form their foreign exchange accounts is not acceptable.
• 8- Regardless of what foreign currency is indicated in the foreign exchange guarantee, the issuance of the foreign exchange guarantee and settlement of its amount is dependent on declaring the amount in one of the eight recognized currencies specified in Circular No. 60/1094 dated 17/5/73 (8-8-94).
• 9- Upon finalization of the Foreign Exchange Guarantee Form's format, it is recommended that the printed form should bear the logo of the relevant bank and to be prepared in five sheets each having a different color as under so that all of the customs copies, for example, would be green and those retained by the exporter are yellow in color;

• 1- The Foreign Exchange Deposit Guarantee must be prepared in triplicate (as in the enclosed sample) in the amount declared and deposited in each instance by the exporter. The document must bear the serial number (that indicated on the reverse side of the Foreign Exchange Guarantee Letter), issue dated and maturity date.
• 2- The first copy of the Guarantee Letter must be retained by the issuing branch of the bank for the transfer of the amount of the foreign exchange and the second and third copies must be stamped "Not Transferable / Not negotiable" . The second copy to be delivered to the exporter for his reference and the third copy to be sent to International Department of the bank or its Computer Services Department.
• 3- Generally, the validity of the Foreign Exchange Deposit Certificate for issuance of Foreign Exchange Guarantee Letter for export is four months from the date of issue. AT any rate, even at the last day of the validity date, issuance of Foreign Exchange Guarantee Letter for import is permitted. (The issuance of Foreign Exchange Guarantee for import by the owner of the foreign exchange deposit certificate is necessary as such document must be enclosed with the purchase order and, along with other documents, submitted to the Central Bank for statistics registration as specified in Section B of this Circular.)
• 4- Within the mentioned four-month period, if the beneficiary of the Deposit Certificate of another party does not make use of the Certificate for import, then the bank is obliged to buy the foreign exchange and pay the beneficiary the equivalent amount of the foreign exchange in Rials and cancel the Certificate.
• 5- Transfer of any amount of the Deposit Certificate's total amount to another importer (real or legal person) dependents on the submission by the concerned party of an authorization by the owner of the Certificate and the presentation of Purchase Order Register Permit issued by the Ministry of Commerce.
• 6- Should the foreign exchange requested for import of goods be different from the foreign exchange required for goods indicated the Purchase Order Permit, the bank must ensure that the foreign exchange is converted at the exchange rate prevailing at the date of issuance of Foreign Exchange Guarantee Letter.
• 7- The branch which issues the Foreign Exchange Guarantee Letter must make notation and certification in the mentioned Form as to for what purpose the foreign exchange was used.
• 8- Should an exporter present to your bank a Foreign Exchange Guarantee Letter issued by a branch of another bank, you bank must comply with the exporter's request (for opening an L/C, acceptance of draft of a transfer) as expediently as possible and then take the necessary action to secure the relevant foreign exchange from the bank which had originally issued the Guarantee Letter.

• 9- With regards to deposits of foreign exchange derived from export on which basis you issue Deposit Certificate: to ensure that the undertakings are met, the Deposit certificate shall be valid for four months from the date of issue until the foreign exchange is not used) it shall be entitled to interest on the basis of interest rate prevailing at the day of the Certificate's issue.

• 10- The rate of interest relating to Item 9 of this circular shall be determined by the International Department of the bank.
• 11- Part payment of interest of Deposit Certificate shall be paid on the basis of the Certificate's hard currency at the end of the four- month validity period or when the foreign exchange is totally used for import or sold to the bank.
• 12- Interest obtained through Deposit Certificate of foreign exchange shall not be considered as part of the Deposit Certificate amount and can not be used for import.
• 13- Interest shall be calculated and converted into Rials on the basis of day's export foreign exchange rate and the account of the beneficiary at the bank shall be credited with that amount.
• 14- The foreign exchange value of the Deposit Certificate, its interest and in general all foreign exchanges bought in accordance with Items B-3, D-1 and E-4 and 6 above shall be kept by the bank. Such amounts should be used for imports under the supervision of this bank (Central Bank) after obtaining relevant information and statistics. (Regulations regarding information and statistics shall be prepared and announced later).