In 2012, sanction-hit Iran had money to buy luxury goods but none for medicines

London:When the United States and the European Union imposed financial and energy sanctions on Iran, in 2012, that nation had no money to buy medicines but spent dollars purchasing luxury goods.

According to a blog published in The Guardian, custom documents showed that Iran spent subsidised dollars on luxury goods even as ministry of health scrambled for medical supplies.

Most western banks and suppliers ended all trade with Iran as they were too afraid but the sale of medicines to Iran was supposedly exempt from sanctions.

When the subsidised rate was introduced in 2012, Reza Fatemi Amin, a deputy planning minister, made it clean it was only for importing essentials, not luxury goods.

As the health ministry struggled to acquire dollars, car importers did brisk business in Iran.

Between March and November 2012, Iranian customs data show importers used more than 617 million dollars acquired at preferential rates to import over 5,000 cars.

Decades-old restrictions on importing luxury cars were eased during the second term of Iranian President Mahmoud Ahmadinejad between 2009 and 2013.

Imports of pharmaceuticals fell while car imports increased after the tightened sanctions, from 830 million dollars in 2011 to one billion dollars in 2012.

In 2012, several experts including Mohammad Mehdi Ghiamat, chair of the board of anaesthesiology, and Ahmad Ghavidel, chair of the Centre for Haemophilia, said that many people had died due to lack of medical aid.

However, there are no official figures of deaths in 2012.

The media ignored the use of subsidised dollars by car importers in reports until November 2012 till the Health Minister Marzieh Vahid-Dastjerdi appeared on state television to say that the Central Bank had granted only 850 million dollars of the 2.5 billion dollars needed to import medicine. So she also obtained Central Bank documents showing importers of luxury goods such as cars were being authorised to use subsidised dollars.

Dastjerdi was eventually replaced as health minister after the Ahmadinejad government denied that car importers had used subsidised dollars.

Dastjerdi’s public criticism of the Central Bank led members of parliament to criticise car importers, with some deputies accusing them of improper links to the government.

Iran’s judiciary also refused to reveal whether there was a legal case, citing “confidentiality.”

The Central Bank had also refused to comment, saying it would not “explain economic matters to a journalist.”

Former Iranian President Hassan Rouhani, who was elected in 2013, is currently under scrutiny for alleged connections to Babak Zanjani, an Iranian billionaire arrested in December of the same year.

Zanjani reportedly helped circumvent the oil embargos, channelling revenue back to Iran through his companies, but has also been accused by Bijan Zanganeh, the oil minister, of owing the ministry 1.9 billion dollars.

The luxury car market in Iran remains vibrant despite some restrictions on the car import and none of the car importers has been summoned before a court.