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American Products Sold in Iran, Despite Economic Sanctions

Reported by Erin Burnett, written by Michelle Lodge
Monday, 6 Dec 2010 | 4:50 PM ET

Americans may be rare in Iran, but American products find their way into the country, despite international sanctions, through a tiny Iranian resort island called Kish (pronounced Keesh).

“Kish to Iran is like Hong Kong to China,” Riad Kahwaji, Inegma founder and CEO, told CNBC. “It is the place where Iran imports all the materials that are subject to international sanctions.”

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A look at Iran's backdoor entry for money, with Fariborz Ghadar, Penn State professor/The Center for Strategic and International Studies.

The island, which is 5 miles by 10 miles, is home to 20,000 full-time residents and the entry point of about 15 percent of Iran’s imports.

That’s why American clothing products, such as Abercrombie & Fitch , Tommy Hilfiger and the Gap are found in Kish’s glittering, well-stocked malls. Those products largely come by way of Dubai.

Many of the shoppers aren’t buying items for their individual use, but are traders, who buy products in Kish and sell them on the mainland for huge mark-ups. These traders earn a weekly allowance of about $500.


Watch Erin Burnett's next report about Iran in the special series "The Forbidden Zone," Tuesday, December 7 on "Street Signs" 2pm ET on CNBC. She will interview the Treasury Department official who oversees enforcement of U.S. economic sanctions against Iran.

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