March 1, 2013 | Quote

Now There’s Proof: Washington May Have Violated Its Own Iran Sanctions

The U.S. government learned this week that it might have run afoul of its own sanctions on Iran — an awkward development, given that the economic penalties are at the heart of international efforts to pressure Tehran over its nuclear program. But here's why it might not be as embarrassing as it sounds:

It begins with a report from the Government Accountability Office revealing that Washington had paid a South Korean contractor $1.5 million to build some houses. The deal itself was nothing controversial. But the same investigation by GAO also found that the contractor, Daelim, had done business with Iran’s energy industry. In effect, that means the United States indirectly helped Iran’s government through a third party — and ran directly afoul of international sanctions levied against the pariah state.

“With sanctions configured as they are, you can generally work in either our financial system or in the Iranian financial system,” said Jonathan Schanzer, vice president of research at the Foundation for Defense of Democracies. “It appears that in the case of this one company, they were not put to that choice.”

This isn’t the first time that Washington may have violated its own Iran sanctions. In December, the military’s inspector general said it couldn’t be certain whether money it gave to Afghanistan had been used to buy Iranian fuel. Since much of the petroleum in the region is a blend of stuff from various sources — Russia, central Asia, and so on — tracing the fuel back to its source is actually harder than you might expect.

There’s good news, though, on several levels. For one thing, of the seven companies accused of doing business with Iran, Daelim was the only company that showed up in U.S. contracting records. Assuming there aren’t more firms beyond the seven mentioned in GAO’s report, that suggests companies are pretty good at holding to the trade ban. Another piece of good news? GAO’s report shows that the system the United States has in place to catch violators works. And that has global implications in its own right.

“As the global shepherd of the Iran sanctions regime,” said Schanzer, “we can't go around asking other countries and companies to cease doing business with Iran until we put our own house in order.”

Read the full article here.


Iran Iran Sanctions