Aug 27, 2014

An Iranian official tasked with fighting corruption has said that in the final three years of the administration of former President Mahmoud Ahmadinejad, $22 billion in exchange-rate abuses took place, with companies using access to government-subsidized exchange rates to to buy luxury items or resell goods at a free market rate and pocket the difference.

“Huge amounts of currency at a prime exchange rate was given to importers who, after investigation, it became clear that some of them are not real, meaning they had no foreign existence,” Kazem Palizdar, head of the office for coordinating the fight against economic corruption, to;d Industry and Development Monthly.

Palizdar continued, “They would get a large amount of currency at a prime rate to acquire essential goods. Not only did they not do this, but we realized that these import companies did not even exist. It’s not clear where this currency went.”

He continued, “Other companies would get currency at a prime rate, meaning 1,226 toman per dollar, in order to import essential goods, but when the goods were imported they were sold at free market prices. These companies had 100% profits and sometimes more.”

Palizdar went on to describe a third type of violation, in which companies would acquire dollars through the prime exchange rate and instead of buying essential goods, the purpose for which the prime rate is offered by the government, they would buy luxury items, such as high end cars.