U.S. criticizes covert Iran business

BERLIN, Oct. 17 (UPI) -- A senior U.S. government official has criticized the fact that foreign-based subsidiaries of U.S. firms are ignoring the trade boycott against Iran.

"There have been activities of foreign-based subsidiaries of U.S. companies in Iran," U.S. Deputy Treasury Secretary Robert Kimmitt said at a news briefing Wednesday in Berlin. "We have urged them to pull out their subsidiaries."

While foreign-based subsidiaries would not legally fall under the trade boycott that bars U.S. firms from doing business in the Islamic Republic, "we make quite clear that we do not approve" of such business, Kimmitt said. The No. 2 diplomat in the Treasury Department added that Washington would watch closely that any company -- no matter where it is based -- lived up to the sanctions put forward against Iran by the U.N. Security Council.

Kimmitt’s remarks follow a recent article by German news magazine Der Spiegel that said Germany, faced with criticism from Washington that some of its firms are still active in Iran, pointed to U.S. companies that covertly still do business there.

The German Foreign Ministry has information that U.S. companies are active in Iran with the help of bogus letterbox companies in the United Arab Emirates.

That some countries follow the sanctions less strictly than others causes "a gradual squeezing out of German companies from the Iranian market," one unidentified leading German Foreign Ministry official told Der Spiegel.

Kimmitt said while he knew that it was difficult for German firms to give up their long standing in the country -- he praised German banks and companies for doing so -- it is vital that the international community would not economically "contribute to the Iranian nuclear program."

The United States has barred its companies from having economic relationships with Iran since the Islamic Revolution in 1979. The U.N. Security Council has put sanctions in place that aim to convince Iran to halt its controversial uranium enrichment program.

The West believes Iran is using its civil nuclear program as a cover to make nuclear weapons, a charge Tehran denies.