Treasury okayed US business with Iran: Report

Companies such as Kraft Food, Pepsi and some largest US banks benefited.

Last Updated: Dec 24, 2010, 09:42 AM IST

Washington: The Treasury Department has granted nearly 10,000 exceptions to American companies over the past decade so that they could skirt US sanctions on Iran and other countries the US considers terrorist sponsors, The New York Times reported on Thursday.

Companies such as Kraft Food and Pepsi and some of the largest US banks benefited, the newspaper said. Most licenses were granted under a law allowing trade in humanitarian goods, even if that ended up including products as diverse as cigarettes and chewing gum.

The story posted on the Times` website implies no illegal activity by administration officials or company personnel. Rather, it suggests the various deals for goods ranging from Louisiana hot sauce to body-building supplements undermine America`s moral and diplomatic authority as the leading purveyor of tough sanctions on Iran, North Korea and other nations.

The newspaper said one American company was allowed to bid on a pipeline job to help Iran sell natural gas to Europe even though the US opposes such deals. Other American companies were permitted to deal with Iranian firms suspected of involvement in terrorism or weapons proliferation, the Times said.

"Allowing the export to Iran of food items like hot sauce or salad dressing from the US is required by statute and, in any event, is trivial in the context of our Iran policy," Stuart Levey, the Obama administration`s sanctions chief, said in a statement late Thursday. "Our efforts are focused on matters like the illicit conduct of the Iranian government and financial institutions that are facilitating it."

Treasury officials noted that the permitted trade was inconsequential compared with the broad scope of US sanctions, as goods sold to Iran amounted to only 0.02 percent of all US exports in the first quarter of this year. And they were but a fraction of a percent of all Iranian imports, officials said.

Congress passed the law easing sanctions for some goods in 2000, largely with Cuba in mind.

Levey said those rare cases don`t conflict with the larger American effort to apply international pressure on Iran, which is already facing four rounds of UN Security Council sanctions over its disputed uranium enrichment program. Instead, they are part of the attempt to ensure that sanctions don`t affect the availability of food, medicine and medical devices to Iranian people as the US pressures Tehran on the nuclear issue, alleged links to terrorism and missile programs.

Kraft Food Inc and PepsiCo Inc didn`t immediately respond to requests for comment.

Part of the problem is that in many countries facing US or international sanctions, the government is a large player in the economy. The Times noted that the documents it obtained through a public records request showed the US approved sale of luxury items to stores owned by blacklisted banks.

In response, administration officials said decisions are made on a case-by-case basis and reflect the realities of import chains, which can link some companies unwittingly to others.

"I haven`t seen any licenses that I thought we should have done differently," Adam Szubin, the director of the Treasury`s Office of Foreign Assets Control, which grants the licenses, told the Times.

But he conceded that US officials weren`t fully investigating every importer.

Bureau Report