28 December, 2005

U.S. Sanctions Nine Companies Under Iran Nonproliferation Act

Bush administration imposes penalties on firms in China, India, Austria

By Susan Krause
Washington File Staff Writer

Washington -- The United States has imposed sanctions on nine companies -- six in China, two in India, and one in Austria -- for selling materials to Iran that can be used in the production of missiles and weapons of mass destruction (WMD), State Department deputy spokesman Adam Ereli said December 27. 

Speaking to reporters, Ereli said the Bush administration imposed the sanctions, which took effect December 23, on the basis of "credible information" that the companies had transferred equipment or technology in violation of the Iran Nonproliferation Act (Public Law 106-178).   

The act, signed into law March 2000, requires periodic reports to Congress when there is evidence that "goods, services, or technology" have been transferred to Iran that are either:

? Included on international export control lists; or

? Controlled by the U.S. government for export to Iran because of their potential use in the development of nuclear, biological, or chemical weapons, or in ballistic or cruise missiles.

Ereli said the six Chinese companies facing sanctions are China National Aero-Technology Import and Export Corporation (CATIC), China North Industries Corporation (NORINCO), Zibo Chemet Equipment Company, Hongdu Aviation Industry Group, Ounion International Economic and Technical Cooperative, and Limmt Metallurgy and Minerals Company.  He described NORINCO as a "serial offender."

Also affected, according to Ereli, are Indian chemical exporters Sabero Organics Gujarat Ltd., and Sandhya Organic Chemicals Pvt. Ltd., and Austrian arms manufacturer Steyr-Mannlicher GmbH. 

The sanctions prohibit the companies from doing business with the U.S. government and will prevent them from receiving export licenses required to buy certain U.S. technologies.

When asked if the sanctions were only a symbolic gesture, Ereli said the nonproliferation legislation has had an impact.

"It's an important and effective tool in constraining Iran's efforts to develop missile and WMD capacity," he said.  "It does have an impact, I think, particularly in alerting governments to activity taking place in their countries and instituting measures or taking actions to prevent those kinds of activities." 

But, he cautioned,  "Nonproliferation is a slippery business and there are always going to be those who, I think, put narrow commercial self-interest above the greater social good or public welfare."

More than 40 entities and individuals have been sanctioned under the Iran Nonproliferation Act since 2001.  Ereli said the United States has had good cooperation from Austria in the current case. 

For more information on U.S. policy, see Arms Control and Non-Proliferation.

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)