Hoarding and Its Punishment

Hoarding and Its Punishment

In today’s society, amid increasing social challenges and economic crises, assisting fellow citizens can help reduce the hardships they face. However, there are always individuals who disrupt the supply of goods, exploit prevailing circumstances for personal gain, and disturb public order. In some cases, such conduct may even endanger public health and human lives.

The Concept of Hoarding and the Elements Required for Its Realization Under Iranian Law

What Is Hoarding?

In its literal sense, hoarding means storing goods with the intention of selling them later at a higher price. In practice, when a person stockpiles essential goods in large quantities and refrains from supplying them to the market, hoarding occurs. Such individuals store goods in excess of their personal needs with the intent to profit. These persons are considered hoarders and typically engage in this conduct during periods of severe public need.

Under Iranian law, hoarding is recognized as both an administrative violation and a criminal offense. A violation refers to the commission of improper conduct that may, in some cases, carry an explicit legal penalty and, in others, may not be expressly penalized.

What Factors Are Required for Hoarding to Constitute a Crime?

Hoarding is considered a criminal offense only when the following conditions are present:

• Pursuit of personal gain and profit: Hoarders seek financial benefit and wealth accumulation, waiting for an opportune time to sell hoarded goods at excessively high prices. Their actions often involve economic and, at times, political motives.
• Political motives and objectives: Hoarding may be carried out to create societal disorder and advance personal or group interests. It is often associated with the overt involvement of certain economic entities or rent-seeking governmental structures.
• Lack of awareness of laws and regulations among some traders: In certain sectors, insufficient knowledge of commercial laws and regulations leads individuals to engage in unlawful practices in the supply and sale of goods, resulting in hoarding, withholding, and market shortages.

Elements of the Crime of Hoarding

• Legal Element: The legislature must have prescribed a punishment for the offender’s conduct. The legal basis for the crime of hoarding is Article 1 of the Law on Punishment of Disruptors of the Economic System of the Country, which addresses both the conduct and its penalties.
• Material Element: The material element focuses on the offender’s conduct. It is essential to determine which actions constitute hoarding under applicable law and the penalties that apply. The conduct constituting hoarding involves the storage and retention of goods with the intent to create a monopoly or a shortage in supply. Such conduct disrupts the economic system.
• Mental Element: The crime of hoarding is not limited to knowledge and intent alone. In addition to general intent, which consists of awareness and deliberate action, the offense requires specific intent. The creation of a monopoly or a shortage in the supply of goods constitutes the specific intent of hoarding and must be clearly established.

Conditions for the Realization of the Crime of Hoarding

• The stored goods must exceed the individual’s personal needs and ordinary customary quantities.
• The goods must be among the essential necessities of the general public.
• The storage must be carried out on a large scale, as determined by the presiding judge.
• The crime must be committed with the intent to create a monopoly or a supply shortage.
• In general, the ultimate objective of hoarding is to profit from future price inflation.

The Difference Between Hoarding and Warehousing

The purpose of hoarding is to create a black market and manipulate supply by injecting limited quantities of goods into the market, thereby worsening public living conditions. Warehousing, by contrast, does not pursue such objectives. For example, many fruits are abundantly available at the end of spring and summer. If farmers were to immediately supply all produce to the market, a significant portion would spoil and be wasted. Therefore, storing fruits in cold storage facilities under standard conditions is a rational and efficient solution, enabling public access to these goods in other seasons as well.

Punishment for Hoarding of Goods

• First Offense: The penalty for a first instance of hoarding includes compulsory sale of all hoarded goods and a monetary fine equal to five percent of the current market value of the hoarded goods.
• Second Offense: For a second offense, the penalty includes the sale of the hoarded goods and a fine equal to twice their current market value. In addition, the hoarder must post a banner or sign indicating the offense for one month.
• Third Offense: For a third offense, the punishment includes the sale of the hoarded goods, payment of a monetary fine equal to five times the value of the hoarded goods, installation of a banner or sign at the business premises indicating the violation, and closure of the business for one month.

Frequently Asked Questions About Hoarding and Its Punishment