Analysis of Legislative Requirements of Ssupporting of Domestic Production through the Local Content Requirement

One of the traditional ways which are used to support the production of domestic goods and services, drafting and implementation of the local content requirement. The government’s intervention in the market through obliging the persons to utilize the domestic products has been reflected in different laws and regulations and independently has been enacted in 1997, 2012 and 2019 in Iran. In this article, it will be discussed that the ideal legislation on this matter is subject to which requirements. This article concludes that using legal instruments for obliging persons to utilize the local products is subject to existence of social and economic justifying reasons. In case of existence of such reasons, the law shall be drafted in such a manner that while meeting the requirements of the rule of law, on one hand, the problem of quasi domestic monopoly is prevented from being formed, and on the other hand, it does not give rise to a situation in which the local producers can supply their occasionally-poor goods and services at the cost of the whole economy and at the same time, lose their ability to compete with the foreign producers.