Incorrect Labeling Under Iranian Law

Incorrect Labeling Under Iranian Law

In Iranian legal terminology, labeling refers to the placement of information on goods. A label may include product specifications, the name of the manufacturer or importer, production and expiry dates, storage conditions, ingredients, safety warnings, and required regulatory approvals. Incorrect labeling arises when the information stated on the product does not correspond to reality, whether the discrepancy is inadvertent or intentional.

Under Article 3 of the Consumer Protection Law, providing inaccurate or misleading information regarding a product’s characteristics constitutes a violation. In addition, under implementing regulations issued by the National Standards Organization, non-conformity between the label and the product’s actual characteristics may constitute a trade violation and, in certain circumstances, a criminal offense. From a criminal law perspective, where an incorrect label deceives consumers, the matter may fall within the scope of the Governmental Punishments framework. Accordingly, incorrect labeling can create civil liability and may also expose the company to criminal liability, particularly when it results in consumer harm or threatens public health.

Civil Liability Arising From Incorrect Labeling

Where inaccurate or misleading information is placed on a product, the manufacturer or distributor may be exposed to civil liability. Under Article 1 of the Civil Liability Act, any person who, without legal authorization, causes harm to another person’s life, property, reputation, liberty, honor, or other lawful rights is obliged to compensate for the damage.

If an incorrect label misleads a consumer and results in an improper purchase decision, unsafe consumption, or bodily or financial harm, liability may arise for the producer, importer, or other responsible party. For example, if an expiry date is incorrectly stated and the consumer subsequently uses a spoiled product, the responsible party may be required to compensate for the resulting losses. Establishing a causal link between the incorrect labeling and the harm suffered is essential. In such cases, courts may rely on official expert opinions to determine whether the label materially misled the consumer. Claims may include material damages and, where justified, non-material damages.

Criminal Consequences of Incorrect Labeling

Incorrect labeling may not only lead to civil liability but also to criminal liability. Article 68 of the Governmental Punishments regime concerning fraud in production and distribution provides that where a person supplies goods with a quality different from what is stated on the label or required by mandatory standards, the conduct may constitute an offense subject to statutory penalties.

Where labeling is intentionally falsified to mislead consumers or supervisory authorities, the conduct may be treated as a fraudulent sale. Moreover, if false labeling threatens public health, particularly with food, pharmaceutical, or health-related products, stricter regulatory regimes may apply, including those associated with the Food and Drug Administration structures in Iran. Depending on the circumstances, penalties may include monetary fines, seizure of goods, suspension or closure of the business unit, and, in certain cases, imprisonment. For this reason, economic operators must exercise high diligence in preparing and verifying product information.

The Role of the National Standards Organization and the Governmental Punishments Organization

The National Standards Organization of Iran, as the official authority for setting and supervising mandatory and voluntary standards, plays a central role in controlling product labels. Under the relevant legal framework governing standards, goods subject to mandatory standards must carry technical specifications, product identification, and complete information in accordance with approved standards.

The Governmental Punishments Organization, as a supervisory authority for economic violations, is also responsible for addressing reports from the public and inspectors concerning fraudulent or misleading labels. If a violation is established, it may impose fines, seize goods, or order the sealing of business premises. Together with trade unions, market inspection bodies, and the Ministry of Industry, Mine and Trade, these institutions form an oversight network that monitors labeling at the production, distribution, and retail levels. Using counterfeit brands, falsifying standard marks, or providing incorrect origin information are treated as violations and may carry legal penalties.

Incorrect Labeling in Imports and Customs Procedures

In the import context, accurate labeling of goods and consistency with supporting documentation are essential. The Islamic Republic of Iran Customs Administration, under the Customs Affairs Law and its implementing regulations, is required to verify the correctness of import documents and product labels.

If a physical inspection reveals an inconsistency between the product label and documents such as the registration order or commercial invoice, customs may suspend clearance and initiate a violation file. Discrepancies may relate to country of origin, production date, intended use, or ingredients. Labeling with a non-genuine brand or falsifying foreign manufacturer details may constitute smuggling or fraud and may be subject to penalties under anti-smuggling legislation. Importers must ensure labeling accuracy and, where required, provide certified translations. Responsibility for labeling errors generally falls on the importer and its official representative in Iran. Therefore, compliant, verifiable, and accurate labeling is a practical requirement for clearance and lawful market placement.

Incorrect Labeling in Health-Sensitive Goods

Incorrect labeling carries more severe consequences for health-sensitive products, including food, pharmaceuticals, and hygienic goods, because it directly affects public health. Under the 1967 Act concerning edible, drinkable, cosmetic, and hygienic substances, labeling fraud in these categories may constitute a criminal offense and may result in imprisonment, fines, or both.

Under the relevant rules of the competent health authorities, product labels must typically include manufacturing license numbers, ingredients, warnings, usage instructions, expiry dates, and storage conditions. Providing false information or omitting critical data, such as allergen content, can expose the producer or importer to criminal complaints by consumers or supervisory bodies. Where bodily harm or illness occurs, and it is proven that incorrect labeling was the cause, the responsible party may face compensation exposure, including blood money or assessed damages, as well as non-material damages. Judicial sensitivity in this field is generally high because the matter involvesthe protection of public health.

Judicial Examples of Liability for Incorrect Labeling

Iranian judicial and administrative practice includes multiple cases in which incorrect labeling led to liability findings. In one case, a seller was penalized for affixing a well-known brand label to unrelated goods, and the matter was treated as a fraudulent sale and trademark-related misconduct, resulting in fines and the seizure of the goods. In another case, an incorrect expiry date on food products allegedly resulted in consumer poisoning, and the producer was ordered to compensate for the loss and pay additional statutory compensation. In other disputes, consumers have relied on the Consumer Protection Law to pursue claims, and courts have held sellers or importers responsible where incorrect labeling was proven. These examples indicate that incorrect labeling may carry serious civil and criminal consequences for suppliers.

Consumer Rights in Relation to Incorrect Labeling

Under the Consumer Protection Law adopted in 2009, consumers have the right to be informed of the true characteristics of goods. Any effort by a seller or producer to conceal reality or provide false information is treated as a breach of this right. Article 4 of the same law indicates that inaccurate information and misleading advertising can create legal responsibility.

A consumer faced with incorrect labeling may file complaints with relevant trade unions, the Governmental Punishments Organization, or consumer protection bodies, and may also pursue compensation. Compensable harm may be financial, physical, or psychological. The law also recognizes the possibility of non-material damages in appropriate cases, offering broader protection. A key practical point is that, in disputes, the producer or seller may bear the burden of demonstrating that the labeling error was not attributable to improper conduct where liability is asserted based on misleading information and consumer harm.

Liability of the Seller and Distributor

Although labeling is primarily the manufacturer’s responsibility, Iranian law may also hold sellers and distributors responsible for incorrect labeling. Article 5 of the Consumer Protection Law provides that the supplier must, prior to sale, ensure the accuracy of the information stated on the goods.

If a seller supplies a product while aware that the label is incorrect, both civil and criminal liability may arise. Even in the absence of actual knowledge, a court may find the seller liable for negligence or civil fault, depending on the circumstances. This approach can also apply to online sales platforms, which are expected to conduct a reasonable initial review of product information. Accordingly, all actors in the supply and sales chain should exercise due diligence in supplier selection and final verification of product information.

Practical Measures to Prevent Incorrect Labeling

To reduce legal risk associated with incorrect labeling, manufacturers, importers, and sellers should implement practical preventive measures. First, engage qualified professionals for label design and printing who are familiar with domestic and international compliance requirements. Second, use tracking systems and product identification codes to verify authenticity and accuracy. Third, conduct continuous quality control to ensure label statements match the product’s actual characteristics. Fourth, obtain legal advice before market entry, particularly for health-sensitive products. Fifth, implement a risk management system that allows ongoing review and periodic audits of labeling processes.

Where new safety information becomes available, manufacturers should update labels accordingly. These measures reduce legal exposure, enhance consumer confidence, and support commercial integrity.

Frequently Asked Questions About Incorrect Labeling Under Iranian Law