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7 Foreign Firms Get Contracts

The US administration, while urging foreign companies to cut business ties with Iran, has given contracts worth nearly $880 million to seven foreign firms involved in Iran's energy sector, the US Government Accountability Office (GAO) said on Wednesday.

The seven companies were Repsol of Spain, Total of France, Daelim Industrial Company of South Korea, ENI of Italy, PTT Exploration and Production of Thailand, Hyundai Heavy Industries of South Korea, and GS Engineering and Construction of South Korea, Reuters reported.

It drew criticism from US legislatures in both parties who say the government should not be contracting with companies that help Iran's economy.

Foreign companies that invest in Iran's energy sector can be sanctioned under US law.

Almost 90 percent of the US funds in these contracts were obligated for purchases of fuel and petroleum products overseas, Joseph Christoff, director of International Affairs and Trade at the GAO, said in testimony prepared for a Senate committee.

The GAO statement was a follow-on to a report it did in March, in which it identified 41 foreign firms that have commercial activity in Iran's energy sector. The new report identified which of those firms had US government contracts from fiscal years 2005-2009.

Republican Senator Susan Collins said she was deeply troubled that the US government still does business with companies that are at least indirectly, aiding and abetting Iran's nuclear program by investing in the Iranian economy.

Collins said current law needed to be enforced, but in light of the new information, Congress also needed to strengthen its sanctions against Iran.

"We did not attempt to determine whether the activities of the 41 firms we identified meet the legal criteria for an investment under the Iran Sanctions Act," Christoff said in his statement to the Senate Homeland Security and Governmental Affairs Committee.

The Iran Sanctions Act allows US sanctions be imposed on foreign firms that invest more than $20 million in Iran's energy sector over a 12-month period. But no sanctions have been imposed under this law.

Insurance Companies
Nearly 300 insurers in California have rejected a state regulator's order to stop making investment in corporations engaged in business ties with Iran.

The insurers, including more than a dozen major firms such as State Farm, Geico and Prudential, are questioning the authority of state Insurance Commissioner Steve Poizner to impose sanctions on such firms.

On Thursday, Poizner released a list of 296 companies that have rejected his order to stop buying stock in 50 companies that operate in Iran, Los Angeles Times, reported.

Poizner estimates that as of March 31, California insurers held about $6 billion worth of stock in foreign-owned corporations that operate in Iran in the areas of defense and energy.
Companies have been put on notice that those securities would be disqualified from being used as part of an insurer's legally required reserves for paying claims, the Department of Insurance said.

© Iran Daily 2010