As the United States is negotiating with China and Russia to reach a compromise list of sanctions to place on the tyrannical regime running Iran one has wonder the US will even enforce any additional sanctions. Presently the United States is paying over $107 Billion to vendors companies that are breaking the Iranian sanctions.
In October Mark Kirk (R-Ill.) and Ron Klein (D-Fla.) sponsored a letter, signed by fifty other congressmen on both sides of the aisle, asking President Obama to enforce a US law aimed at giving teeth to some of the sanctions already in place.
“Laws are on the books to crack down on the current regime in Iran, and it is long past time they were enforced,” Klein said. “We cannot allow foreign companies to flagrantly violate U.S. law by investing millions in Iran’s energy sector with no penalties. Our comprehensive strategy to address the threat posed by a nuclear Iran must include giving real teeth to sanctions that are already the law of the land.”
The Iran Sanctions Act of 1996 requires the President to sanction entities that invest more than $20 million in Iran’s energy sector. Not one of the past three Presidents Clinton, Bush and Obama have done the necessary job in enforcing this act or the other sanctions which were passed by the UN Security Council.
These pages have gone into depth about how the US is ignoring the fact that the Nokia/Siemans alliance is selling Iran high tech monitoring device to help the regime crack down on dissidents.
The New York Times identified 74 companies that have done business both in Iran and with the United States government over the last decade. Out of the 74:
- 14 no longer do buisness in Iran
- 11 are in Iran but promise to pull out right after they finish this one last progect
- 49 are still getting money from the US and Iran
During that period these companies have been awarded more than $107 billion in contract payments by the Federal Govt. The past three administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.
It is interesting to note that not included in the dollar figures is the funds used to bail out Chrysler, but both its old owner, Daimler and its “new” Fiat are still active buisness partners of both the US and Iran. Also included in the currently active list is Toyota, Tyson Foods and Samsung which as a company based in South Korea should be well aware of the dangers of a crazy regime expanding its nuclear weapons capability.
Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.
Beyond $102 billion in United States government contract payments since 2000 — to do everything from building military housing to providing platinum to the United States Mint — the companies and their subsidiaries have reaped a variety of benefits. They include nearly $4.5 billion in loans and loan guarantees from the Export-Import Bank, a federal agency that underwrites the export of American goods and services, and more than $500 million in grants for work that includes cancer research and the turning of agricultural byproducts into fuel.
In addition, oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.
In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.
The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.
“We are very aggressive, using a range of tools,” said Denis McDonough, chief of staff to the National Security Council.
How about no more US government contracts, that is a very aggressive tool that is easy and shows that America means what it says?
The government can, and does, bar American companies from most types of trade with Iran, under a broad embargo that has been in place since the 1990s. But as The Times’s analysis illustrates, multiple administrations have struggled diplomatically, politically and practically to exert American authority over companies outside the embargo’s reach — foreign companies and the foreign subsidiaries of American ones.
There is a great deal of politics behind the non enfocement of the Sanctions act.
….in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies
Such as South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
John Bolton, former United Nations ambassador in the Bush administration, said failing to enforce the law by punishing such companies both sent “a signal to the Iranians that we’re not serious” and undercut Washington’s credibility when it did threaten action.
Mr. Bolton recalled what happened in 2004 when he suggested to the Japanese ambassador that Japan’s state-controlled oil exploration company, Inpex, might be penalized for a $2 billion investment in the Azadegan field in Iran. “The Japanese ambassador said, ‘Well, that’s interesting. How come you’ve never sanctioned a European Union company?’ ” Mr. Bolton recounted.
Inpex was never penalized, though several years later it decided to reduce its stake in the Iranian project. And to Mr. Bolton’s chagrin, the Bush administration did not act on reports about other such investments, neither waiving the law nor penalizing violators.
Now, though, frustration over Iran’s intransigence has spawned a growing, if still piecemeal, movement to more effectively use the power of the government purse to turn companies away from investing there.
Nineteen states — including New York, California and Florida — have rules that bar or discourage their pension funds from investing in companies that do certain types of business in Iran. Congress is considering legislation that would have the federal government follow suit, by mandating that companies that invest in Iran’s energy industry be denied federal contracts. The provision is modeled on an existing law dealing with war-torn Sudan.
Obama administration officials, while indicating that they were open to the idea, called it only one variable in a complex equation. Right now, the president’s priority is on breaking down Chinese resistance to the new United Nations sanctions, which apply across borders and are aimed squarely at entities that support Iran’s nuclear program.
But just today China’s Foreign Minister said new sanctions on Iran will not solve the standoff over its nuclear program, and Russia continues to resist an embargo on weapons shipments to Iran
So as the world community gets all tied up in its underwear trying to find the best powder-puff-type sanctions that can get by both Russia and China in the Security Council, why not enforce existing sanctions?
William A. Reinsch, president of the National Foreign Trade Council…. argues that their futility can be seen in the intransigence of the Iranian government and the way American oil companies have simply been replaced by foreign competitors. Moreover, many foreign companies with business interests in Iran are also large American employers; deny them federal contracts and other benefits, Mr. Reinsch said, “and it’s those workers who will pay the price.”
But Hans Sandberg, senior vice president of Atlas Copco, which is based in Sweden, offered a different perspective. Atlas Copco’s sales of mining and construction equipment to Iran are dwarfed by its American business, including military contracts. If forced to choose, he said: “It would be no problem. We wouldn’t trade with Iran.”