Iranian Rogue Carrier Blocks U.S.-Based National Iranian
Financial Times: US companies use stealth to sidestep Iran embargo
By Guy Dinmore in Tehran and Edward Alden in Washington
US companies are quietly strengthening their presence in Iran, circumventing
US sanctions in the expectation that improved relations between the two
countries will lead to a lifting of Washington's unilateral trade embargo
within a year.
In a calculated gamble that Washington will not raise objections, the
companies have found ways to use foreign subsidiaries or Iranian middlemen
to sell to Iran without technically violating the sanctions.
European businesses exhibiting at Tehran's trade fair this week accused
Washington of double standards. They say the US is turning a blind eye
towards its own companies dealing with Iran, while harassing foreign companies
operating in the Iranian market when they seek business in the US.
This is indicative of Washington's current ambivalence towards Iran.
President Bill Clinton is eager for an opening to Iran that could become
part of his foreign relations legacy.
But Iran remains a political time bomb in the US. The recent convictions
of 10 Iranian Jews on espionage charges has angered the US Jewish community
and its congressional supporters, blocking any chance of even a modest
US initiative until after the November elections.
President Clinton, citing Iran as a threat to national security, signed
an executive order in 1995 that barred US business dealings with Iran.
In 1996, Congress passed the Iran-Libya Sanctions Act, which allows for
sanctions against foreign companies participating in Iran's oil industry.
None of these efforts is preventing American products from being widely
available in Iran.
Hewlett Packard and Intel products are common sights on Jomhouri Street,
Tehran's most popular area for computer equipment. Iranian police and other
security services use Motorola radios.
General Motors has held discussions with Pars Khodro, an Iranian carmaker,
to get back into the Iranian market, Iranian officials say. General Motors
owned Pars Khodro before it was nationalised.
Many of the products make their way to Iranian markets courtesy of
Iranian middlemen, particularly in Dubai. Said one Iranian business consultant:
"The US is not monitoring things very closely. They must know that
agents in Dubai are importing far more US goods than the local Dubai market
But more direct routes are also available. While the trade embargo
prohibits foreign subsidiaries of US companies from trading with Iran under
the direction of the parent company, this restriction is easily sidestepped.
As long as the US parent does not "facilitate" the transaction
or directly approve the actions of a foreign subsidiary, those subsidiaries
are free to deal with Iran.
That channel has been particularly important for US oil companies,
which fear they will be frozen out of the development of Iranian oilfields.
Conoco, the US oil group, has analysed seismic data for the National Iranian
Oil Company through its British subsidiary.
Those transactions are currently under investigation by the Office
of Foreign Assets Control, the US Treasury agency that enforces the trade
embargo. Conoco has denied violating the embargo.
The uncertainty over enforcement of the sanctions regime has encouraged
US companies to take risks. "A lot of companies are out there pushing
the envelope because it is so grey," said a US lawyer who counsels
companies on trade with Iran.