Iran official says trade zones to get liberal laws
TEHRAN, March 17 (Reuters) - A senior Iranian official said on Wednesday
he expected liberal laws fostering foreign investment in Iran's free trade
zones to be passed despite the opposition of a top conservative body.
``The whole thing will be wrapped up in two months. I don't think we
will have any problems with laws and regulations in the trade zones,''
said Morteza Alviri, the head of the trade zones.
Alviri told Reuters he expected the bill, blocked last month by the
conservative Guardian Council, to end up before the more powerful Expediency
Council, which is led by former President Akbar Hashemi Rafsanjani.
``Mr Rafsanjani is a strong defender of foreign banking and I think
he will help to undo the knot,'' Alviri said. Iran's parliament on Tuesday
made changes to the bill but maintained key measures that would guarantee
foreign investment in the zones against seizures and allow majority-owned
foreign and private Iranian banks and insurance firms into the areas.
The move came despite opposition by the Guardian Council, which vets
parliamentary legislation, and which has opposed the measures as unconstitutional.
The Expediency Council has the power to overule the Guardian Council.
``(Parliament's) changes were made in a way not to damage investment
operations in free trade zones,'' Alviri said. ``Guaranteeing banking and
insurance was critical for us.''
The law, which would also float the Iranian rial in the zones despite
strict exchange rate controls in the rest of Iran, has been designed to
draw much-needed foreign investment.
Protectionist laws passed after the 1979 Islamic revolution have largely
frustrated efforts to woo foreign investment. Officials say the trade zones
have only drawn $300 million in foreign funds in the past five years.
Iran's current legislation requires that banks and insurance firms in
the zones be 51 percent owned by the government. The laws also seriously
restrict the establishment of foreign banks and insurance companies in
The government of President Mohammad Khatami hopes foreign investment
in the trade zones will help to stimulate the economy, which has been severely
hit by flagging oil prices. Iran's free zones are on the Gulf islands
of Kish and Qeshm and at the southeastern port of Chahbahar.