July 15 2002
The directives provide that the different types of work involved in such projects must be contracted out, either individually or collectively, to Iranian companies and institutes. The executive organization must take certain steps in order to identify the most suitable Iranian companies to undertake such work, including consulting with the SMPO, conducting inquiries and holding a tender, where necessary.
If, having taken these steps, the executive organization concludes that no competent Iranian company is available, or there are insufficient numbers of such companies available, it may assign the work to an Iranian-foreign joint venture, as long as it has first produced a report justifying why this is necessary and has obtained authorization from the Council of Economy. An Iranian-foreign joint venture will only be awarded a contract if the Iranian interest in the joint venture is equal to at least 51% of the consideration which it will receive for performing the contract.
The tender and inquiry notices must clearly and unequivocally state that Iranian companies and institutes are free to participate in the tender either independently or in the form of a civil partnership with foreign companies, as long as the Iranian interest in the civil partnership is at least 51%. When submitting its bid to the executive organization, an Iranian-foreign joint venture that wishes to participate in the tender must also submit a copy of its letter of agreement or understanding.
The executive organization will assign work exclusively to a bidder that undertakes to execute and implement 51% of the value of the work using equipment, accessories and services that are already produced and sold in Iran, or that can be produced in Iran. Contracts may only be awarded to bidders that undertake to execute less than 51% of the value of work using Iranian resources with the prior approval of the Council of Economy.
In order to obtain a clear idea of the contractual value of the work that is to be executed and performed inside Iran, the executive organization must request the bidders to provide clear and unambiguous information on the following items in the tender documents:
For further information on this topic please contact Behrooz Akhlaghi at International Law Office Dr Behrooz Akhlaghi and Associates by telephone (+98 21 873 21 38) or by fax (+98 21 873 41 29) or by email (email@example.com).
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