Buying American in Tehran: Apples, razors and Coke

By Nasser Karimi

Associated Press

Published: Friday, Sept. 14 2012 11:55 a.m. MDT

"Since a long time ago, Iranians have learned that American products are among the best," said Masoud Mohajer, an economic columnist who writes for Iranian newspapers and journals. "If the government bans them, they will infiltrate the Iranian market through smugglers since there is a market for them because of their reputations."

Last year, American companies exported $229 million worth of products to Iran not blocked by sanctions, according to U.S. government and independent figures cited by the U.S. Institute of Peace. The list is as eclectic as it gets: Frozen bull semen, artificial teeth, chewing gum, cranberries, toothpicks and antibiotics. The top U.S. export last year: more than $11.2 million worth of butter.

The figure has seesawed over the years, from a high of $747 million in U.S. exports to Iran in 1992 to just $28,000 in 1998, the institute said. Iran also buys U.S. commodities such as wheat, corn and soybeans.

Until U.S. sanctions were tightened in recent years, some major American companies such as heavy equipment maker Caterpillar, General Electric Co. and Hewlett-Packard Co. had a presence in the Iranian market through non-U.S. affiliates or distributors. But all later said they were canceling any ties with Iran — following similar moves by European heavyweights including Germany's appliance maker Siemens AG, steel and machinery company ThyssenKrupp AG and Italian energy company ENI.

Much of the sanctions-covered American products arrive via networks in Asia in which buyers legally purchase U.S. goods and then reship them to Iran. Previously, the primary route was through Dubai, but authorities in the United Arab Emirates have significantly stepped up inspections of Iran-bound cargo for possible U.S. sanctions violations.

"Dubai is like a hypermarket for Iran," Ahmed Butti Ahmed, executive chairman and director general at Dubai Customs, said in April.

A Tehran-based technology industry analyst, Jafar Tehrani, said the UAE is still a main jump-off point for iPhones and other Apple products coming to Iran.

"Technology does not recognize borders. Apple is very popular in Iran, and customers have no problem except after-sale services," said Tehrani.

This is where hackers such as 23-year-old Amir comes in. He charges between $5 and $10 to "jailbreak" an iPhone to work on Iran's domestic mobile network. "I have 10 to 15 customers every day," said Amir, who gave only his first name because reprogramming the phones is illegal.

That's about the same number of daily sales of Apple laptops and iPhones at Mansour Ahadi's electronics store in the Tehran digital mall.

"We import them from neighboring countries simply because there is a high demand," he said.

But there are clear pressures. A nosedive in the value of the Iranian rial — which hit an all-time low against the dollar this week — has sharply raised the cost of imports. This has almost doubled prices of many imported items from cosmetics to cell phones to spare parts of cars.

For Iran's extensive middle class — many with university degrees and near Western-standard lifestyles — the blows to their buying power could bring more heat on authorities as they try to ride out sanctions.

Amir, the iPhone jail-breaker, summed up his slice of Americana in the middle of Tehran: "I earn from Apple, I drink Coke and I dream of buying a Ford Mustang."

Murphy reported from Dubai, United Arab Emirates.

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