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Why Sanctions Against Iran Never Work

Updated on March 7, 2010
UN sanctions make Iran laugh
UN sanctions make Iran laugh

 American companies and their subsidiaries outside of the USA have been making quite a good sum of money despite previous sanctions designed to hurt Iran. Try $107 billion in the last 10 years. This includes $15 billion to companies that are developing Iran's oil fields. More than two-thirds of the government money went to companies doing business in Iran’s energy industry. Oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.

All total, 74 companies have business dealings with Iran, and 60 continue to do so despite any sanctions in place. The Iran Sanctions Act, created to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it and it has angered most European nations.

The problem is that the companies have many subsidiaries outside of the US. Recently, the US awarded Daelim a $111 million contract. The South Korean firm then signed a contract with Iran ($600 million) to develop the South Par gas field in Iran. Shell Oil in 1999, got a $800 million contract to develop two oil fields. Since then, Shell has been awarded $11 billion in US contracts in providing fuel to US troops. That is a sweet deal! Sanctions? Auto companies doing business in Iran, for instance, received $7.3 billion in federal contracts over the past 10 years. Among them was Mazda, whose cars in Iran are assembled by a company called the Bahman Group. The Bahman group is 45% owned by Sepah that provides funding to Iran Revolutionary Guards. Honeywell has received $13 billion since 2005. Most of this came from a British firm they bought that was expanding a gas refinery in Arak, Iran.

The major companies continuing doing business with Iran despite sanctions or a threat of sanctions are: Tyson Chicken, Shell Oil, Siemens, Sony, Alcatel (IT network) BASF, Mazda, Atlas-Copco, Bayer, Nissan, BP (British Petroleum which is developing oil fields there), Nokia, Canon, Fiat, Daelim, HP computers (stopped in 2009), Mercedes benz, ENI (which is developing one million acres for oil production).

The above is only the the tip of the iceberg. Now you know why Iran is laughing at any sanctions the UN will toss and any of Obama's threats are just meaningless to Ahmadinejad.


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      trasparency international 7 years ago

      From Indymedia portal:

      SHELL & embargo: here's how the Dutch foraging Iran.

      Hundreds of U.S. companies have sold sensitive technology and know-how to the Iranians but also famous European multinationals. As Royal Duch Shell.

      Chemicals, weapons, technologies, software, spares for the war industry, nuclear and oil. Always arrives in Iran for everything. And by all. Especially from Shell. Which is also fun to make fun of the United States.

      For bringing the American authorities and ask for an international letter rogatory against society Irasco (October 2009) it took an official complaint to the Italian government authorities. Before all sleep more or less peacefully.

      One thing is the fiction film and the reconstruction of so many Americans telefim and another thing is to put in writing - on paper - the shady dealings of Iran as it did in its report a 007 secret service. Altana Pietro, considered an agent of military intelligence writes bluntly in a confidential letter to General Nicolò Pollari (Sismi), and the general Mario Mori (Sisde), and to the Italian government authorities on September 15, 2004:

      "For many years I work for the SISMI (Military Intelligence) full time and occasionally for SISDE (civilian secret service) as a consultant in my areas of responsibility such as Iranian society ... ... I was stopped by the Police Station Genoa Pontedecimo ... and was seized abundant material relating to the Iranian society that are the focus of our investigations ... the material in question concerns the Iranian trading companies (all controlled directly by the Iranian Government) which the companies: IRASCO, NISCO, IRITEC, IRISA, IRITAL, IRAN AIR, TEEN TRANSPORT, and many others, all companies that have dealings with Iranian intelligence services and from our investigations that have encouraged the export - from Genoa to Iran - high-tech "Made in USA (prohibited by the embargo) and also technology military and nuclear technologies. A lot of this documentation was filed in confidential files in my computer (all impounded) … and are now being studied by investigators ... I trusted my lawyers have also feared the possibility that the judges (pm Anna Canepa e GIP Todella) may question the Iranian society for a review of documentation found in my possession. In this regard I would point out - the illustrious President of the Italian Republic - the potential risk (also true) that the Iranian society (and therefore also inductively the Iranian government) can become aware of our investigations carried out in recent years on their behalf. With all the serious and irreparable consequences for the diplomatic implications of our nation".

      6 years after the complaint appears to have remained as before. ran continues to do a roaring trade with the West in every field. William Hague, British Foreign Secretary (fatal coincidence that the same name of the city which houses the headquarters of Shell in the Netherlands) recently reaffirmed that the UK does not encourage trade and investment with Iran because of "serious concerns about the nature of Iran's nuclear program". This is the paradox. The Iranians continue to do great business, especially with European multinationals. As the oil giant Shell.

      Feel (or read) what he writes Michiel Brandjes, General Counsel Corporate of Royal Duch Shell Plc, to the ambassador Mark D. Wallace (United Against Nuclear Iran) when the latter - given the close relationships Shell-Iran - threatened action at the SEC, FSA, il New York Stock Exchange, the London Stock Exchange: “we have not yet taken a decision as to whether to proceed with the persian NLG Project”.

      So serafic replied the CEO of Shell on January 14, 2010. Not so long ago (see document pdf attached to the margins of this Article).

      Obviously it was a colossal hoax. Brandjes was aware of lying shamelessly . A few years ago, exactly 30 November 2006, to La Hague, in Holland, at the headquarters of the Shell International BV was present he with IP Counsel of Shell Int. BV Mr. Anouk Boon when he signed a confidential Agreement between Shell Research Limited and CEO of Irasco Srl Dr Kamyab Tehrani Soroosh (this last is a trading company based in Genoa, which is controlled by the Iranian government).

      The top secret agreement is named “Secrecy and restricted use Agreement for Sulfinol process”. In this negotiation involving several European and Canadian companies: Shell Research Limited, Irasco Srl, Royal Duch Shell, Gas Liquids Engineerings Limited, IOOC-Iran Offshore Oil Company, Iritec, Siirtec Nigi, e Thermo Design Engineering Limited. For at least a couple of years the project is fully launched (Kharg Islands Gas Gathering and NLG Recovery Project - EPC contract for Onshore Reception Facilities, Pipelines, NLG Process, Storage and Export Facilities – Contract No. 3660-85-2FC).

      The process object by the Secrecy Agreement called “Sulfinol Process” has been patented by Shell in 1960 and is a very high technological know-how that has a myriad of applications, especially in the oil industry for the production of aromatic compounds and the purification of acid gas streams.

      “The Shell process for the production of aromatic compounds is of primary importance in the removal of benzene, toluene and xylene, being able to obtain products with a purity of 99.9% with almost total recovery. Since sulfanol is used in these extraction processes, capital investments are minimized, costs are reduced and increase the plant capacity was increased and the purity of the synthesized compounds. The splitting of gasoline for the enrichment of aromatic compounds, led to mixtures with a higher octane fuels and refined for jet engines”.

      The “Sulfinol Process” is an outstanding business that has generated a mountain of money for Shell (in rials and dollars) and profits have increased tenfold in the Iranian Kharg Islands.

      And 'thanks to this technology that to Kharg Island (Iran) it was possible to install a huge deposit of petroleum products. With increasing levels of production Kharg Island has also become the biggest export terminal in the Persian Gulf. The U.S. government estimates are that Iran is a major exporter of oil in the world, the fourth-largest country, and trade of crude oil accounts for 80% of exports. Despite the sanctions and the embargo in place against Iran petrochemical giant Shell this year, rather than reduce supplies of crude oil from Iran, has actually increased by 30% benefiting from - among others - for large discounts on the official price market.

      Certainly the latest sanctions have made it harder to do business with Iran. Fortunately, there are companies like Shell that continue to bankroll the Persian country, bringing into the coffers of the Ayatollah billion dollars cash (Only 2-3 months in the summer of 2010, Shell has paid into the coffers of the Islamic republic over $ 2 billion for oil supplies). And all this business is not carried out secretly. It 's all in the light of the sun.

      A deadly blow to the U.S..

      Iran is being urged by close economic isolation and military? Iran under strict economic embargo (with all that mountain of money)? But do not make us all laugh.

      The river of money paid by Shell goes directly to the oil company that is owned by the state, which passes it to the government in Tehran. In turn, the Iranian President Mahmoud Ahmadinejad has this immense financial resources to fund nuclear research (from civil to military), the purchase of next-generation ballistic missiles, hi tech arms, all the possible and imagination scientific and technological know-how, as well as all the toys of war that the Iranians as naughty children yearn to possess. And now. If not cry flying down to earth