Structural Distinction Between Foreign Exchange Rate Differentials and Foreign Exchange Commitments: A Legal, Contractual, and Regulatory Analysis

Abstract: In the foreign exchange regulatory system of the Islamic Republic of Iran, the conceptual and structural distinction between “foreign exchange commitments” and “foreign exchange rate differentials” plays a critical role in ensuring regulatory transparency, improving the efficiency of currency allocation mechanisms, and protecting the rights of economic actors. Nevertheless, these two categories are often erroneously grouped under a single classification in executive practices and the circulars of the Central Bank, leading to a conflation of legal constructs, the imposition of undue liabilities on importers, and violations of the principle of legality in penalties.
The purpose of this study is to analyze the legal, contractual, and supervisory dimensions of these two distinct constructs and to clarify their foundational differences within the framework of governing laws, banking regulations, cabinet resolutions, and quasi-judicial practices. This research employs a descriptive-analytical method, drawing upon documentary sources, regulatory instruments, and judgments issued by competent authorities. The findings indicate that exchange rate differentials are neither criminal in nature nor part of contractual foreign exchange obligations. Rather, they arise from state-level policy changes and should be treated as public fiscal claims subject to financial or civil jurisdiction—not as regulatory violations subject to punitive enforcement.
Ultimately, the study recommends that the legislature and the Central Bank establish a distinct legal framework for handling such claims, avoiding their improper classification alongside foreign exchange commitments, and creating a clear structure for their resolution, settlement, and judicial review.