Governmental Discretionary Punishments Law (Ta’zirat)

Governmental Discretionary Punishments Law (Ta’zirat)

The Expediency Discernment Council of the Islamic System approved this enactment. The subject of “Governmental Ta’zirat” was reviewed in multiple sessions, and following extensive deliberations, the “Governmental Discretionary Punishments Law” was finally approved on March 13, 1989.

Article 1
In view of the necessity for governmental supervision and control over economic activities, and the need to enforce price-setting regulations and distribution rules, violators of such regulations shall be subject to discretionary punishments in accordance with the provisions of this Law.

Procedure for Review and Rules Governing the Issuance of Decisions in Ta’zirat

Chapter One: Violations and Related Discretionary Punishments

Article 2

Overcharging is defined as offering goods or services at a price higher than the rates determined by competent official authorities, whether provisional or final, as well as failure to comply with price-setting rules and any other actions that result in an increased price of goods or services for the purchaser.

Discretionary punishments for overcharging, depending on the amount and repetition of the violation, are as follows:

A. Overcharging up to IRR 20,000

1. First occurrence: Written warning and opening of a case file.
2. Second occurrence: Strict warning, obtaining a written undertaking not to reoffend, and stamping the business license with “First Violation.”
3. Third occurrence: Fine from IRR 5,000 up to five times the amount of overcharging, and stamping the license with “Second Violation.”
4. Fourth occurrence: Fine from IRR 10,000 up to ten times the amount of overcharging, suspension of all or some governmental services for one to six months, and stamping the license with “Third Violation.”
5. Fifth occurrence: In addition to the fine under the fourth occurrence, there will be a temporary closure for one to six months, and a public notice will be posted identifying the unit as an overcharger.
6. Sixth occurrence: Closure and revocation of the business license.

B. Overcharging exceeding IRR 20,000 up to IRR 200,000

1. First occurrence: Fine equal to the amount of overcharging and a written warning.
2. Second occurrence: Fine from one to two times the amount of overcharging and stamping the license with “First Violation.”
3. Third occurrence: Fine from one to five times the amount of overcharging, warning of suspension of governmental services, and stamping the license with “Second Violation.”
4. Fourth occurrence: In addition to the fine under the third occurrence, suspension of all or some governmental services for one to six months, and stamping the license with “Third Violation.”
5. Fifth occurrence: In addition to the fine under the fourth occurrence, there will be a temporary closure for one to six months, and a public notice will be posted identifying the unit as an overcharger.
6. Sixth occurrence: Closure and revocation of the business license.

C. Overcharging exceeding IRR 200,000 up to IRR 1,000,000

1. First occurrence: Fine from one to two times the amount of overcharging, obtaining a written undertaking not to reoffend, and stamping the license with “First Violation.”
2. Second occurrence: Fine from two to five times the amount of overcharging, suspension of all or some governmental services for one to six months, and stamping the license with “Second Violation.”
3. Third occurrence: In addition to the fine under the second occurrence, temporary closure for one to six months, posting a public notice identifying the unit as an overcharger, and stamping the license with “Third Violation.”
4. Fourth occurrence: In addition to the fine under the second occurrence, closure and revocation of the business license, and revocation of the commercial card.

D. Overcharging exceeding IRR 1,000,000

1. First occurrence: Fine from two to five times the amount of overcharging, written warning, and stamping the license with “First Violation.”
2. Second occurrence: Fine from five to eight times the amount of overcharging, suspension of all or some governmental services for one to six months, and stamping the license with “Second Violation.”
3. Third occurrence: In addition to the fine under the second occurrence, temporary closure for one to six months, posting a public notice identifying the unit as an overcharger, and stamping the license with “Third Violation.”
4. Fourth occurrence: In addition to the fine under the second occurrence, closure and revocation of the business licenses,e and revocation of the commercial card.

Note

In the event of repetition, discretionary punishments proportionate to the amount and recurrence of the violation shall be imposed.

Article 3

Short selling and fraud are defined as offering goods or services in a quantity or quality less than the amount purchased, relative to the quantitative or qualitative basis used by official authorities for rate determination. Discretionary punishments for short selling and fraud shall be identical to those prescribed for overcharging, taking into account the amount and recurrence.

Article 4

Hoarding is defined as keeping goods in bulk, as determined by the competent authority, and refusing to عرضه them with the intention of overcharging or causing harm to society, after the Government has a necessity of supply.

Discretionary punishments for hoarding are as follows:

1. First occurrence: Obligation to sell the goods and a fine equal to ten percent of the value of the goods.
2. Second occurrence: Sale of the goods by the Government and a Government of twenty to one hundred percent of the value of the goods.
3. Third occurrence: Sale of the goods by the Government, a fine of three times the value of the goods, suspension of all or part of governmental quotas and services for up to six months, and posting a public notice at the unit identifying it as a hoarder.
4. Fourth occurrence: In addition to the third-occurrence penalties, revocation of the business license and a public announcement through mass media identifying the unit as a hoarder.

Note

Where goods are held with the knowledge of the competent authorities, such holding shall not be deemed hoarding.

Article 5

Sales outside the official distribution network are defined as offering goods in violation of distribution rules and networks designated by the Ministry of Commerce and other relevant ministries.

Discretionary punishments for sale outside the network, based on the quantity sold, are as follows:

1. First occurrence: Written warning and suspension of quota for three months.
2. Second occurrence: Fine up to two times the amount of sales outside the network.
3. Third occurrence: Fine from three to five times the amount of sales outside the network.

Note

If the goods have not been sold, the offender shall, in addition to the obligation to expose the goods through the network, be fined an amount equal to 10% of the official value of the goods.

Article 6

Failure to display prices is defined as failure to indicate the prices of covered goods or services in a manner visible to customers, whether by label, tag, or by posting a price board at the unit.

Discretionary punishments for failure to display prices are as follows:

1. First occurrence: Written warning and recording in the unit’s file.
2. Second occurrence: Fine from IRR 5,000 to IRR 50,000.
3. Third occurrence: Fine from IRR 50,000 to IRR 100,000, suspension of all or some governmental services for three to six months, and, where deemed appropriate, posting a public notice identifying the unit as an offender.

Note

Where official prices have been determined for goods and services, the displayed price must be based on those prices.

Article 7

Concealment of goods and refusal to supply are defined as refraining from offering goods subject to official pricing, with the intention of overcharging and engaging in discriminatory sales practices.

Discretionary punishments for concealment and refusal to supply are as follows:

1. First occurrence: Written warning, recording in the unit’s file, and عرضه of goods at the official price.
2. Second occurrence: Offering goods at the official price and a fine of two to five times the official value of the goods.
3. Third occurrence: In addition to the second occurrence penalties, suspension of all or some governmental services for three to six months.

Article 8

Failure to issue an invoice is defined as refusing to issue an invoice in accordance with forms and rules determined by the Ministry of Economic Affairs and Finance, or issuing a false invoice for covered items.

Discretionary punishments for failure to issue an invoice are as follows:

1. First occurrence: Written warning and recording in the unit’s file.
2. Second occurrence: Fine from IRR 5,000 to IRR 50,000.
3. Third occurrence: Fine from IRR 50,000 to IRR 100,000, suspension of all or some governmental services for three to six months, and, where deemed appropriate, posting a public notice identifying the unit as an offender.

Article 9

Failure to comply with price-setting and distribution rules is defined as failure, without a justified excuse, to apply and submit the required documents to the competent legislative authority for the implementation of price-setting and distribution rules for more than three months from the date of clearance of imported goods or the production of covered domestic goods.

Discretionary punishments are as follows:

1. Stage One: Written warning and extension of time for a maximum of one week.
2. Stage Two: Fine from one to five times the official value of the goods and extension of time for a maximum of one week.
3. Stage Three: In addition to the Stage Two penalties, suspension of quota or governmental services for three months, and suspension of the commercial card for one year.

Note

The above stages shall be applied separately to each product.

Article 10

Failure of importers to fulfill obligations in exchange for receiving foreign currency and governmental services is defined as a violation of governmental import rules that results in non-performance of obligations, reduction in the quantity or quality of goods, or withdrawal of foreign currency from the country.

Discretionary punishments are as follows:
A fine equal to the difference between the applicable foreign exchange rate and the prevailing market rate, or restitution of the foreign currency itself to the extent of the deficiency or non-performance, suspension of the commercial card from six months to one year, and in the event of repetition, suspension from one year up to revocation. In cases of misuse, in addition to the above penalties, a fine of up to five times the amount of misuse may be imposed.

Note

If the imported goods are of an authorized type, they shall be returned to the owner after the above punishments are applied.

Article 11

Failure of producers to fulfill obligations in exchange for receiving foreign currency and governmental services is defined as failure, without justified excuse, to produce and supply products in accordance with the contract and government deterGovernment, including type, quantity, price, standard, delivery conditions, and similar requirements.

Discretionary punishments are as follows:
Written warning recorded in the unit’s file, notification to the relevant ministry or institution, a fine equal to the difference between the foreign exchange rate and the prevailing market rate or restitution of the foreign currency to the extent of the deficiency or non performance, and in the event of repetition, in addition to the foregoing, a fine from one to three times the amount of misuse.

Note

If production units import raw materials or commercial goods, they shall be subject to Article 10.

Frequently Asked Questions about the Governmental Discretionary Punishments Law (Ta’zirat)