• Home
• /
• Business

Big firms pulling out of Iran due to US sanctions rules

Dutch banking group ABN Amro and the UBS bank of Switzerland announced last week that they would halt business operations in Iran and the US energy services company Halliburton severed links last year.

The US Justice Department is investigating all three firms for possible violations of US sanctions against Iran, the Wall Street Journal reported, citing lawyers, securities filings and unnamed sources familiar with the probe.

ABN Amro last month admitted to improper transactions with Iran through a branch in Dubai and agreed to pay 80 million dollars in fines.

Other major firms still operating in Iran are also under scrutiny, including HSBC bank, Standard Chartered, and BNP Paribas, the paper wrote.

Federal authorities are conducting several sweeping sanctions inquiries, looking at compliance with US sanctions against Iran, Iraq, Libya, Sudan and Cuba, the report said.

The investigations are examining whether European banks with branches in New York adhered to US sanctions and prohibitions against individuals or firms designated as having links to terrorism.

US enforcement of the sanctions has become more strict following demands from lawmakers in Congress in 2004, the paper reported.

“In the past, they have been lax,” said Karim Sadjapour, an analyst with the International Crisis Group told the daily.

Other companies that are not under investigation have also decided to pull out of Iran, sometimes citing political risk related to Iran’s diplomatic isolation. The firms include Credit Suisse of Switzerland, US energy firms Baker Hughes and ConocoPhillips, US insurance broker AON and industrial giant General Electric.

Two Western companies, a consumer electronics manufacturer and an auto company, have postponed contracts for factories in Iran until at least April, the paper said, without naming the firms.

European businesses have become wary of pursuing deals in Iran after the country’s hardline president, Mahmud Ahmadinejad, called for the destruction of Israel and denied the Holocaust as a “myth.”

“That hurt them in Europe incredibly,” sanctions expert Mike Beck from the University of Georgia told the paper. “There are real financial and economic consequences for those kinds of actions, and this illustrates that.”

Iran faces mounting international concern over its nuclear programme, which Western governments suspect is a cover for a weapons project. Teheran insists it is a purely peaceful programme designed to generate electricty and has threatened to cut back on oil exports if UN Security Council members choose to impose sanctions. Foreign ministers from Britain, China, France, Russia and the US agreed in London on Tuesday to have Iran referred to the UN Security Council over its disputed nuclear program. In a compromise demanded by Russia, UN action would be put off until at least March.