Skoda Auto is not involved in the sudden appearance of its vehicles on the Iranian market after a four-decade absence and is “ready to take the necessary steps to protect our rights and legitimate interests”, the Czech subsidiary of Volkswagen told bne IntelliNews on July 25.

“Skoda Auto does not export any vehicles to Iran and no negotiations are currently underway to enter the Iranian market,” said a company spokesman, Pavel Jina.

He added that the automaker “does not have any authorised partner in the Iranian market, therefore potential customers would not be able to take advantage of the opportunities and benefits that are associated with customers purchasing a Skoda vehicle within the Skoda authorised distribution network”.

This publication on July 17 cited local reports on how five Skoda models were slated for Iranian showrooms following a revision of the Islamic Republic’s car import regulations to allow imports of both used and new cars. A company called Iran Rover is to serve as the dealership for Skoda sales in Iran, with fellow Iranian company Pars Sater Houshmand Co, the importer, according to various Persian-language Iranian media reports.

The Skoda models purportedly set to become available to Iranian car buyers are the Karoq, Octavia Sedan, Scala Station Wagon, Kamiq Crossover and the Kushaq, a crossover exclusively manufactured in India.

It is not clear from where the Skoda cars being made available for sale in Iran are sourced.

Historically, cars have made their way on to Iran’s market either via the United Arab Emirates port of Dubai or overland from Turkey. However, another neighbour of Iran, Armenia, has lately become a substantial automotive re-export hub, particularly in terms of supplying the sanctioned Russian market.

One question is whether sales of new Skoda models on the Iranian market could invoke US sanctions. In an FAQs section on the website of the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, the following, dated August 6, 2018, is written: “Is the sale, supply, or transfer of finished vehicles or ‘auto kits’ to Iran sanctionable under the New E.O. [presidential executive order]?

“E.O. 13846 does not make sanctionable the export of finished vehicles to Iran if no further assembly or manufacturing is required. As such, exporting fully assembled and finished vehicles to Iran for sale would not be sanctionable, so long as the transaction is consistent with U.S. sanctions, including that it does not involve a sanctioned person.

“In contrast, ‘auto kits’ (or ‘knock-down kits’) exported to Iran for assembly in Iran would be considered goods or services used in connection with the automotive sector of Iran and the export of such kits to Iran would be sanctionable if the transaction is ‘significant.’ (See FAQ 289 for an interpretation of the term ‘significant.’).”