U.S. Punishes 13 Companies for Iran Deals

A common Bush administration refrain is that foreign companies can either do business with the United States or “rogue regimes,” but not both. The United States underscored that message April 1 by imposing sanctions on 13 foreign companies for trading with Iran, while waiving penalties on six Russian companies which Washington says have mended their ways.

Sanctions were imposed on five companies from China, two from Macedonia, two from Russia, and one each from Belarus, North Korea, Taiwan, and the United Arab Emirates. The companies were said to have exported items that appear on international arms export control regime lists or that could aid Iran’s production of missiles or chemical, biological, or nuclear weapons. Tehran is currently under intense international scrutiny for illegal nuclear activities exposed last year.

A Department of State official told Arms Control Today April 22 that Iran is aggressively seeking imports for all of its covert weapons programs. Because there is no expectation that Iran will stop trying to procure such items, the official said the focus must be on cutting off supply.

The newly sanctioned companies, some of which have been sanctioned previously, are prohibited from doing business with or receiving aid, arms, or other defense goods from the U.S. government for a two-year period.

The action has drawn some reproofs from the targeted countries. Russia’s Ministry of Foreign Affairs announced April 3 that “Russia rejects the very principle of the imposition by one state of sanctions on some structures of other states.”

It is not apparent that any of the sanctioned companies have dealings with the U.S. government, but the Bush administration still views the penalties as valuable—an assessment amply illustrated by the fact that it has imposed proliferation sanctions nearly 80 times. In contrast, the Clinton administration averaged about eight sanctions per year, according to June 2003 congressional testimony by Undersecretary of State for Arms Control and International Security John Bolton.

U.S. officials insist that, even if a company has few ties with Washington, sanctions may shame another government to clamp down on companies under its control or dissuade other companies from doing business with the sanctioned party.

In a March 12 interview with Arms Control Today, Paula DeSutter, the assistant secretary of state for verification and compliance, said that sanctions “force countries into less effective acquisition routes.” She cited Libya’s problems with its former chemical weapons program as evidence. “When the equipment came and wasn’t what they needed, they really didn’t have a complaint mechanism,” DeSutter explained.