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As Nokia touts its N8 smartphone reaching the shores of Britain, Access Now’s “No to Nokia” campaign raises curious questions about “Nokia’s relationship with totalitarianism.”

It suggests there is no excuse for Nokia to be doing business with Iran, in particular – “given that Iran’s telecommunications infrastructure is majority owned by Iran’s Revolutionary Guards — the very same group that is responsible for suppressing and killing countless Iranian civilians”. We imagine it has something to do with a pay cheque. No to Nokia suggests that Nokia has been flogging surveillance technologies to repressive regimes.

Nokia has said that its only connection to Iran now is in “contractual links” and referring former customers to Trovicor, a private company Nokia Siemens integrated in 2007 then sold on to Perusa Partners Fund March, 2009. However, Access Now suggests that Trovicor’s relationship is curious. It, says the campaigners, does much of what Nokia used to be up to, allegedly playing part in tracking services.

And Access Executive Director Brett Solomon says he’s heard reports that “many in the Iranian government believe that they are still doing business with Nokia Siemens”.

Access points out some bizarre similiarities. Trovicor has, apparently, the same staff: former head of worldwide sales at Nokia, Johann Preinsberger, is Trovicor managing director and CEO “along with at least three other top executivies who transitioned between the companies.”

Access Now finishes its statement with some open questions to Nokia: If Nokia Siemens is concerned about human rights abuses, why are they referring people to a company that actively facilitates such abuses? And at what point does Nokia Siemens believe that it is no longer responsible, legally or otherwise, for the technology that it has created?

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Source: BBC

October 18, 2010

Iran says it has a right to peaceful nuclear technology

The United States has asked the Chinese government to do more to stop Chinese companies helping Iran with its nuclear programme and missile technology.

A senior US official told the BBC that Washington had provided Beijing with a list of firms it believed had been operating in violation of UN sanctions.

Beijing promised it was committed to implementing the sanctions and that it would investigate, the official added.

The US believes Iran is seeking to build a nuclear bomb. Iran denies this.

In June, the UN Security Council imposed a fourth round of sanctions on Iran over its refusal to halt uranium enrichment activities.

The technology used to enrich uranium for use as fuel for nuclear power can also be used to enrich the uranium to the higher level needed to produce a nuclear explosion. Tehran says its intentions are peaceful.

Centrifuges

On Sunday, the Washington Post reported that the US intelligence believed several Chinese companies and banks were involved in providing restricted technology to Iran, mostly for its missile programme.

A second official, also speaking anonymously, told the Post that Chinese companies had been discovered selling Iran high-quality carbon fibre, which could help make better centrifuges needed to enrich uranium.

In 2008, Iran allegedly obtained 108 pressure gauges, which are critical to the functioning of a centrifuge, from one Chinese company

On Monday, a senior US official told the BBC that the concerns were raised during a visit to Beijing last month by state department official Robert Einhorn, who oversees the enforcement of sanctions against Iran and North Korea.

The official said the Chinese government had promised it was committed to implementing UN resolutions against Iran, and that Washington expected it to take the appropriate steps to stop any violations.

“We did provide some information to China on specific concerns about individual Chinese companies and the Chinese assured us that they will investigate,” state department spokesman PJ Crowley later told reporters.

The BBC’s Kim Ghattas in Washington says it is believed that Chinese officials did not authorise the activity of the companies.

When sanctions were passed this summer at the UN, the US and the EU were concerned that Chinese companies would fill the vacuum left by Western companies pulling out of Iran, our correspondent adds.

On Sunday, Iranian President Mahmoud Ahmadinejad said it was ready to resume negotiations with the West on its nuclear programme.

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By Andy Greenberg

Source: Forbes Blog The Firewall

October 14, 2010

Here’s a lesson for corporations selling high tech surveillance equipment to digitally repressive regimes: The taint of dictatorship isn’t easy to wash off, even after a year of public relations scrubbing.

Access Now, a free speech organization, launched a  ”No To Nokia” petition Wednesday that’s quickly spreading through Facebook and Twitter, criticizing the company’s dealings with the Mahmoud Ahmadinejad’s regime in Iran and calling on Nokia to “completely end all sales, support, and service of tracking and surveillance technology to governments with a record of human rights abuses.”

That will be a tough demand for Nokia to satisfy: In fact, the company has said it already exited the Iranian business more than a year ago.

In a statement to the European Parliament in June, Nokia Siemens admitted that it had sold “lawful intercept” capabilities to Iranian data providers over several years, equipment that could be used to identify and track political dissidents or other opponents of Iran’s dictatorship. Those statements confirmed reports from the Wall Street Journal a year before that accused Nokia Siemens, a joint venture between the Finnish mobile provider and the German tech conglomerate, of supplying Iran with technology it used to find and imprison political opponents, reports that the company strenuously denied at the time.

The company’s testimony in the European Parliamentary hearing on information technology and human rights abuses sounded much like the confession and policy promises that Access’s petitioners are now looking for:

While we halted all work related to monitoring centers in Iran in 2009, including service and support, we believe that we should have understood the issues in Iran better in advance and addressed them more proactively. There have been credible reports from Iran that telecommunications monitoring has been used as a tool to suppress dissent and freedom of speech. We deplore such use of a technology that can bring so many positive benefits to society – and that, in fact, we believe has brought so many positive benefits to Iran.

But Nokia’s Siemens’ Iran public relations morass has only widened, thanks in part to a lawsuit brought by one Iranian, 56-year-old Isa Saharkhiz, in a Virginia Court. Saharkiz, a journalist and political dissident, was arrested and imprisoned after his Nokia phone was tracked by the company’s Intelligence Solutions law enforcement tracking technology. While Saharkiz has been in prison for the past 14 months, he and his son Mehdi Saharkiz have accused Nokia Siemens in a civil complaint of “aiding and abetting the undemocratic, tyrannical and repressive Iranian government’s humiliation, torture and unconscionable human rights abuses.”

Imprisoned Iranian dissident Isa Saharkiz

You can read the latest version of the complaint here.

Nokia Siemens has responded in court that it’s not liable for how its foreign customers use its technology under the U.S.’s Electronic Communications Privacy Act. But the Electronic Frontier Foundation has called on the company to drop that defense and take legal responsibility for Saharkiz’s sad fate. “The time is now for Nokia to ‘be accountable’ for its role in the repression of Mr. Saharkhiz and likely thousands of others. And it must do so not just in the press room, but in the court case, dropping its cynical claims that corporations should never be held accountable for their role in human rights violations,” the EFF’s Eddan Katz writes in a statement.

I’ve asked Nokia for comment and will update when I hear from the company.

The moral of the story, particularly for companies like IBM that have expressed their eagerness to sell data mining technology to China: Once you’ve put your foot in a human rights quagmire, even defending yourself in court will only sink you deeper.

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By John Pomfret

Source: The Washington Post

September 30, 2010

The United States announced Thursday that four of Europe’s five biggest oil companies would end their energy investments in Iran, a significant advance in the Obama administration’s efforts to pressure the Iranian government to enter negotiations over its alleged nuclear weapons program.

At the same time, U.S. officials said they were working to pressure China and other countries to bar their companies from filling the vacuum created by the departing Europeans.

Deputy Secretary of State James P. Steinberg said Royal Dutch Shell, based in Britain and the Netherlands; France’s Total; Eni of Italy; and the Norway-based Statoil had committed to no further investments in Iran.

“These companies have provided assurances they will stop or are taking significant verifiable steps to stop their activity in Iran,” Steinberg said. He also announced that the United States was slapping sanctions on a subsidiary of an Iranian oil company in Switzerland.

Steinberg’s announcement marked the first public actions since the United States tightened sanctions against Iran on July 1 ,when President Obama signed the Comprehensive Iran Sanctions, Accountability and Divestment Act into law. Since enhanced U.N. sanctions were authorized against Iran in June, the United States, the European Union, Japan, South Korea, Canada, Norway and Australia have passed legislation further targeting Iran’s economy and energy sector. Iran says its nuclear program is entirely peaceful.

Among the other moves announced Thursday, the State Department said European and Kuwaiti firms along with Russia’s Lukoil, India’s Reliance and Turkey’s Turpras have stopped or promised to stop selling gasoline and other refined products to Iran. British Petroleum and Shell said they are no longer supplying jet fuel to Iran Air. And Lloyd’s of London announced it would not insure or reinsure petroleum shipments going into Iran.

While Iran’s president, Mahmoud Ahmadinejad, has said the effect of the sanctions so far has been “pathetic,” Steinberg contended they had begun to bite.

“We have pretty good indications,” he said, “that whether it’s in the financial sector, whether it’s in shipping and transportation, that these measures are increasingly having a significant impact on Iran. There’s no question that . . . their ability to do business is being hindered in lots of different ways.”

The four European oil companies are not the only ones committing to ending investment in Iran. Japanese officials said earlier this week that the Japanese oil giant Inpex was readying an announcement that it, too, would halt its investments in Iran’s largest onshore energy project, the Azadegan oil fields. Japan obtains one-fourth of its oil from Iran. U.S. officials had threatened to place Inpex on a sanctions watch list if the firm did not end its business in Iran.

Steinberg also announced that the State Department would begin investigating other oil companies that had not committed to winding up their Iranian investments. Among those companies, sources said, are China’s oil firms, such as the China National Offshore Oil Co., China National Petroleum and Sinopec.

Robert Einhorn, a senior U.S. official, has been in Beijing this week with a delegation from the Treasury and State departments to persuade China not to engage in, as Steinberg put it, “backfill.”

Asked specifically about China, Steinberg replied: “Without mentioning specific countries or companies, we have made clear to all of . . . our international partners that we are strongly discouraging” those companies from increasing their investments in Iran while other firms back out. Japanese officials have told their U.S. counterparts that they are particularly concerned that as Inpex exits the Azadegan oil field, Chinese companies will step into the breach.

Iran is China’s third-biggest supplier of oil, after Angola and Saudi Arabia. Chinese state-owned oil companies have signed memorandums committing to invest more than $100 billion in Iran’s energy sector over the past few years, although only a small fraction of those funds have been invested.

Chinese companies have a history of moving in on projects that Western and Japanese firms have left dangling. In June 2009, China National Petroleum signed a $5 billion contract with National Iranian Oil to develop the massive South Pars gas field, after the Iranians accused French oil producer Total of delaying the project. And last year China National Petroleum reportedly agreed to invest around $2 billion to develop the South Azadegan fields in place of Inpex, which had cut its share.

In a letter to Secretary of State Hillary Rodham Clinton on Tuesday, Sens. Charles E. Schumer (D-NY) and John Kyl (R-Ariz.) pushed for sanctions against three Chinese companies for continuing to do business with Iran.

Some diplomats questioned whether the United States has the stomach to sanction major Chinese companies given the sensitive nature of Washington’s relations with Beijing. The Obama administration is focused on trying to convince China to allow its currency to appreciate against the dollar. Ties with China’s military, which have been suspended for months, are only just resuming. And, diplomats said, there are questions about whether the threat of U.S. sanctions would actually worry China’s oil giants. They have little business in the United States. One of the firms active in Iran, the China National Offshore Oil Corp., or CNOOC, was stopped from buying the U.S. oil firm Unocal in 2005.

“The goal here is not to impose sanctions for sanctions’ sake but to end companies from doing business with Iran,” Steinberg said.

However, he added, “if we conclude that that cannot be done and under the requirements of the law that we need to impose sanctions, we will do it.”

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Source: BNO News/IslandCrisis.net

September 30, 2010

TEHRAN – Four major non-U.S. energy firms are pulling out of Iran to comply with U.S. sanctions and have committed to end all business with the country and its subsidiaries, the U.S. State Department announced on Thursday.

The U.S. State Department said that, as part of their efforts to increase pressure on the Government of Iran, the U.S. has been “aggressively urging foreign governments and companies to avoid commercial activity in Iran’s energy sector” and will continue to do so until Iran complies with its “international obligations.”

Royal Dutch Shell, Total, Statoil, and Italy ENI are among the companies that are pulling out to avoid U.S. penalties that target companies that are doing business with Iran. Recent legislation gives the U.S. power to penalize foreign companies who are investing more than million in Iran’s energy sector. The U.S. believes that Iran is pursuing nuclear weapons capability, but Iran categorically denies this, and insists its nuclear program is for peaceful purposes.

One of the companies that will face new sanctions is Naftiran Intertrade Co, an alleged subsidiary of the National Iranian Oil Company and key conduit for funds for the Iranian oil industry.

Companies are taking steps to comply with the sanctions are exempt from penalties. There are a number of companies allegedly being investigator for possibly breaching sanctions, but the U.S. State Department has thus far, failed to name them.

This announcement comes about a day after the U.S. froze the assets of eight senior Iranian officials that are accused of serious human rights abuses, following the disputed presidential election in June 2009. They will also be barred from travelling to the U.S. and will not be able to do business with U.S. companies.

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By Maria Sheahan

Source: Reuters/Fox Business

September 23, 2010

FRANKFURT – ThyssenKrupp said it wouldfreeze all new business with Iran with immediate effect andterminate existing contracts there as soon as possible inresponse to ever-harsher sanctions against the Islamic Republic.

“By halting business with Iran we are supporting thesanctions policies of the Federal Republic of Germany, theEuropean Union and the United States,” Ekkehard Schulz, chiefexecutive of Germany’s biggest steelmaker, said on Thursday.

ThyssenKrupp is the latest in a series of German companiesreducing business ties with Iran.

Carmaker Daimler said earlier this year it would sell itsstake in an Iranian engine manufacturer and freeze plannedexports to Iran, following similar moves by Siemens, Munich Re and Allianz.

A spokesman for ThyssenKrupp said Iran accounted for lessthan 0.5 percent of group revenues of 40.6 billion euros ($54.42billion) in its fiscal year that ended on Sept. 30, 2009.

Most of ThyssenKrupp’s existing business in Iran comprisedengineering projects for cement factories, he said.

“The latest executive board decision prohibits all newbusiness with Iran and thus goes beyond the current sanctionsmeasures, which relate primarily to the petroleum sector (oiland gas0,” ThyssenKrupp said in a statement.

ThyssenKrupp announced it decision a day after foreignministers of major powers told Iran they hoped for an earlynegotiated solution to the stand-off over its nuclear programme.

Western countries have urged Iran to return to thenegotiating table over its nuclear programme, which they fear isaimed at producing nuclear weapons. Tehran says the programme ispurely for peaceful purposes.

ThyssenKrupp was part owned by Iran for many years from theshah’s era in 1970s until the company bought enough of itsremaining shares in 2003 to avoid being put on a U.S. governmentblacklist. (Reporting by Maria Sheahan; editing by Andrew Dobbie)

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By Spencer Swartz

Source: The Wall Street Journal

August 24, 2010

LyondellBasell Industries NV, one of the world’s biggest plastic and chemical producers, will end its business operations in Iran to shield itself against penalties the U.S. could soon impose on companies for violating trade sanctions.

The Dutch-based company’s board approved the decision early this month after months of deliberation, according to David Harpole, a LyondellBasell spokesman.

In the past year, a number of companies—including many of Iran’s gasoline suppliers—have cut business ties with Iran because of worries about legal consequences in the U.S. and elsewhere, and public-relations concerns. They include Royal Dutch Shell PLC, which halted gasoline sales, and Toyota Motor Corp., which suspended car exports.

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LyondellBasell’s decision means it will stop all licensing of its proprietary technology and services to Iranian petrochemical companies, which have depended heavily on technology from European concerns to produce plastics and other high-value products derived from natural gas.

Mr. Harpole said the move would be “immaterial” to LyondellBasell’s overall operations.

But the decision is a blow to the Iranian government, which is trying to build the country’s petrochemicals industry to diversify the economy.

Iran exported some $6.5 billion of petrochemical products in 2009, according to Facts Global Energy, a Singapore-based consultancy that tracks the Iranian energy sector. That is a small amount compared with the value of Iran’s oil exports.

LyondellBasell’s Mr. Harpole said that the mounting pressure over sanctions played a decisive role in the board’s decision to halt its Iranian operations. The company—which has extensive U.S. operations, particularly in Texas—is also ending its business ties in Syria and Sudan. Those countries are also covered by existing U.S. sanctions.

The decision also reflects LyondellBasell’s desire to avoid legal problems after exiting bankruptcy protection in April. The company plans to list 566 million shares on the New York Stock Exchange any day, according to Mr. Harpole, to beef up its capital position and help fund its growth plans.

He said the company recently made a “voluntary disclosure” about the nature of its past business in Iran to the U.S. agency that enforces sanctions, the Office of Foreign Assets Control, which is a unit of the Treasury Department.

He declined to elaborate. OFAC wouldn’t comment on LyondellBasell’s case or whether other companies had made similar disclosures.

The Obama administration could soon announce plans to sanction or warn companies, primarily from Europe and Asia, that they are in violation of U.S. sanctions against Iran.

“The administration is in the final stages of reviewing cases of potentially sanctionable activity [of companies] under U.S. law and expects to be making decisions on those cases soon,” a senior official said.

The official declined to specify which companies are being targeted, but a person familiar with the matter said the State Department is considering action against about 10 companies. The companies could face civil or even criminal penalties depending on the nature of any confirmed violations, but such action could take months.

The U.S. last month adopted new sanctions against Iran, primarily targeting the country’s energy sector.

For the first time, the rules require firms to effectively choose between doing business in the U.S. or Iran. Australia, Canada, the European Union and the United Nations have also passed their own versions of sanctions against Iran in recent months.

U.S. companies have long been barred from doing business in Iran. A report earlier this year from the U.S. Government Accountability Office, an oversight agency and arm of Congress, cited 41 companies, nearly all from Europe and Asia, with operations in Iran’s oil, natural gas and petrochemical industries from 2005 to 2009.

LyondellBasell, German engineering firm Uhde GmbH and Italy’s Maire Tecnimont SpA, an energy and engineering-services firm, were named in the GAO report as firms with business in Iran’s petrochemical sector in the past five years. Other foreign companies like them also work in Iran’s petrochemical sector, analysts say.

Uhde is a unit of German industrial conglomerate ThyssenKrupp AG. Alexander Wilke, a ThyssenKrupp spokesman, said that “to the best of our knowledge, all group companies are in full compliance with U.S. sanctions against Iran.” Maire Tecnimont didn’t respond to requests for comment.

Analysts say that actually levying penalties against companies for violations of U.S. sanctions could be a long, drawn-out process posing many hurdles.

OFAC has to establish a variety of legal criteria, including whether a company’s apparent violation was part of a “pattern or practice” and whether a company demonstrated “reckless disregard” of U.S. sanctions law, in order to determine what action can be taken, according to agency enforcement guidelines. If OFAC thinks a company’s actions could lead to a violation, the company may receive just a cautionary letter.

Illustrating the barriers to the imposition of sanctions, the recent GAO report said that in 1998 the U.S. made its first and only determination that a company’s investments violated existing U.S. sanctions against Iran. In that case, the sanctions were eventually waived because they were deemed to conflict with American foreign-policy interests.

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Isa Saharkhiz has been in prison in Iran since last year's postelection crackdown.

Source: Radio Free Europe/Radio Liberty (RFE/RL)

August 18, 2010

We reported on August 17 about the lawsuit against Nokia Siemens Networks by a prominent jailed Iranian journalist, Isa Saharkhiz, who implicated Nokia Siemens in his arrest last year. He accuses them of delivering surveillance equipment to Iran that allowed authorities to trace his whereabouts through his cell phone.

“Persian Letters” spoke to Edward Moawad, an attorney at the Maryland-based Moawad & Herischi law firm, who is representing Saharkhiz and his son, blogger Mehdi Saharkhiz.

RFE/RL: What are you trying to achieve by taking Nokia Siemens to court?

Edward Moawad: Nokia’s actions — what they’ve done so far — really run counter to international law and international human rights laws and is pretty much in violation of United States law. Injuries to the main plaintiff here, Isa Saharkhiz, and to Mehdi and multiple others were inflicted as a result of the actions of Nokia Siemens network. And there is no other venue or any other place that we could bring them to justice except here in the United States.

Attorney Edward Moawad

RFE/RL: Is this a symbolic action against Nokia Siemens or are you really hopeful that you will achieve some of the demands you’ve listed in your complaint?

Moawad: We are hoping to win this. We’re not just asking only for damages that happened to the plaintiffs, we’re asking Nokia Siemens to help in assisting the release of prisoners — primarily Isa Saharkhiz — and also we would like them to stop cooperation with the Iranian government with regards to spying and surveillance. We’re also asking that they stop giving governments around the world who are known for violations of human rights this sort of technology so inflictions of these similar acts will not happen to these people, as well.

RFE/RL: What do you say to those who argue, including some Nokia Siemens representatives, that the same mobile technology that can be used for repression was used by Iranian activists? For example, many activists their cellphones to shoot scenes of police violence that were later posted on YouTube and watched by many around the world.

Moawad: We applaud the effort of telecommunication companies helping people in the Third World and people around the world reach other and reach the outside world. But we people of the world and people of the United States condemn acts that help repressive governments arrest and stifle dissent, torture journalists, and torture activists unjustifiably. I think it’s one thing to provide good technology but another to provide bad part of the technology.

RFE/RL: What kind of documents or proof are you going to present in court?

Moawad: We can’t really comment right now about what documents and things we have because we don’t want to prejudice both defendants and also not harm our plaintiffs who are our clients. As the case progresses, a lot of these documents will become public, and I think people around the world will know the extent of the violations that Nokia Siemens have committed.

RFE/RL: You’ve filed a lawsuit against Nokia Siemens on behalf of Saharzkhiz. Nokia has said that it is studying the case. What’s next?

Moawad: Once we file, we will serve all the defandants with their complaint. Then they’d have a certain set time to answer depending on the time they were served and then the procedural fight would start.

– Golnaz Esfandiari

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Source: Reuters U.S.

August 11, 2010

* Toyota: halted exports due to “international situation”

* Toyota shares fall 1.8 pct vs 2.7 pct drop in Nikkei

TOKYO Aug 11 (Reuters) – Toyota Motor Corp (7203.T) said on Wednesday it had suspended auto exports to Iran indefinitely since June, amid growing international scrutiny of companies dealing with the country.

U.S. President Barack Obama on July 1 signed a law imposing tough new sanctions on Iran‘s banking and energy sectors, hoping to curb nuclear work that Tehran says is for energy production but Washington suspects is aimed at bomb-making. [ID:nLDE6610EE]

The Nikkei business daily reported on Wednesday Toyota has decided to stop shipments because companies continuing to deal with Iran have come under scrutiny from the U.S. government.

“We made the decision after taking into account the international situation including sanctions by the U.S. and the U.N. on Iran,” said Toyota spokeswoman Shiori Hashimoto.

The spokeswoman declined to comment on whether its business with Iran was under scrutiny from the U.S. government. The U.S. is the biggest market for the automaker.

A representative of Toyota in Iran said the company would continue to sell its products in the Islamic state, the Students News Agency ISNA reported.

“We do not deny what has been announced today … But the company will continue to sell its products in Iran. Our customers should not be concerned over getting services and spare parts as well,” Mohammad Reza Shahbazi was quoted by ISNA as saying.

Toyota exported roughly 4,000 automobiles, such as the Land Cruiser four-wheel-drive vehicle, to Iran in 2008. The number fell to 246 in 2009 due to the global economic downturn.

This year, its Iranian exports had reached 222 by the end of May, but no exports have been made since then.

On Aug. 3, Japan approved new sanctions against Iran in line with a U.N. Security Council resolution in June, including adding 40 companies and an individual to a blacklist targeted for a freezing of assets.

Shares of Toyota fell 1.8 percent to 3,020 yen, while the benchmark Nikkei average .N225 dropped 2.7 percent. (Reporting by Chang-Ran Kim and Nobuhiro Kubo in Tokyo; Vinay Sarawagi in Bangalore; Ramin Mostafavi in Tehran, Editing by Joseph Radford and Erica Billingham)

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The nuclear power plant in Bushehr, Iran: Customs officials at Frankfurt Airport say they intercepted in July a shipment of Siemens parts, including switches, switching components and computer modules, destined for a Russian customer. German authorities say that the Russian customer was supposed to forward the Frankfurt shipment through Moscow to its final destination, Iran's controversial nuclear reactor in Bushehr. Reuters

By Dinah Deckstein and Matthias Schepp

Source: Spiegel Online

August 9, 2010

Engineering giant Siemens has officially stopped doing business with Iran. But German customs officials say they recently intercepted a shipment of Siemens parts whose final destination was allegedly the Iranian nuclear reactor in Bushehr.

July 1, 2010 will likely go down in the history of German engineering giant Siemens as the day the company ended a 140-year-old business relationship, one that was steeped in tradition. On that date, the Munich-based company stopped accepting new orders from Iran.

The decision, which management had made last fall, makes Siemens one of the few major German companies that has responded to pressure from the German government and from the United States to completely withdraw from the country, with its internationally ostracized president, Mahmoud Ahmadinejad.

Löscher and his advisers normally like to boast about how they are role models when it comes to global business ethics. Nevertheless, they allowed July 1, the day the company stopped accepting orders from Iran, to pass without further comment. It was probably a good idea, in light of what allegedly happened a few days later at Frankfurt Airport, in a scene that hardly seems to fit to Siemens’ image as a trailblazer in the art of ethical deals.

According to customs officials at the airport, they intercepted a shipment of Siemens parts, including switches, switching components and computer modules, destined for a Russian customer. German authorities say that the Russian customer was supposed to forward the Frankfurt shipment through Moscow to its final destination, Iran’s controversial nuclear reactor in Bushehr.

Public Relations Crisis

More than 30 years ago, Heinrich von Pierer, who would later become Siemens’ CEO, secured the contract, worth billions, for the scandal-plagued Bushehr project. Today Atomstroyexport, a subsidiary of the Russian nuclear company Rosatom, is completing construction of the reactor.

Atomstroyexport has triggered a public relations crisis for Siemens, which is in the process of forming a joint venture for the peaceful use of nuclear energy with the Russians.

According to the shipping documents, the sensitive high-tech components were initially destined for a subsidiary of Atomstroyexport which describes itself as a “research and design institute,” a name that sounds more American than Russian. Nevertheless, it is the Russian firm and its parent company, Atomstroyexport, that are jointly handling the Bushehr contract.

Both companies are under enormous time pressure, after having promised to finally complete the former Siemens reactor by September — about 10 years later than the original completion date.

Munich-based Siemens stopped accepting new orders from Iran on July 1, in response to pressure from the German government and from the United States to completely withdraw from the country. ddp

Strict Embargo

According to German border officials, the Siemens parts were to be shipped from Moscow to Bushehr. A company spokesman insists that no one in the company was aware of what was happening in Moscow.

The authorities say that if the Siemens components had been forwarded to Bushehr, it would have constituted a violation of the European Union’s strict embargo against Iran, which was tightened even further at the end of July. This information prompted the customs officials at Frankfurt Airport to refuse to allow the Siemens shipment to leave the country.

“We are aware of the incident,” says Atomstroyexport spokeswoman Olga Zylova, “but we have no comment.” After being contacted, a Siemens spokesman said that he could not rule out the possibility that the material may have come from a reseller and that it possibly was completely harmless.

Strategically Important

The ominous incident will likely reignite a fundamental dispute that has been simmering among the EU, Russia and Iran for some time. The German government and other European countries suspect that Iranian President Ahmadinejad is seeking to develop nuclear weapons under the guise of a civilian nuclear program, which Ahmadinejad vehemently denies. The Europeans fear that the Bushehr plant could be misused to build bombs.

It was because of these concerns that, under the EU’s former Iran embargo rules, strategically important products like computers and control devices could not be shipped to Iran from or through Germany, even if they were intended for allegedly civilian nuclear programs like Bushehr. The rule applies to any such products, no matter where they come from.

The only exceptions are relatively harmless products like light bulbs and electrical outlets. An export permit must be requested for so-called “dual-use” products that could potentially be used for military or civilian purposes. In the Siemens case, this export permit had apparently not been applied for — and would probably not have been issued even if it had.

Part 2: Russians Criticize German Position

Russia and Iran, for their part, are criticizing the German position as extreme. To support their argument, they cite parallel United Nations sanctions rules, which are not as strict as the EU rules. Under the UN rules, products can be shipped to Iran if they are intended exclusively for the civilian nuclear energy program.

Despite the existence of the UN sanctions, the EU countries apply their own, substantially more restrictive rules. And it is precisely those rules that prohibit shipments like the one recently discovered at Frankfurt Airport — with only few exceptions. In Germany, a number of agencies are charged with enforcing the embargo, including the Federal Office of Economics and Export Control and the extremely active customs authorities.

Insiders report that German customs in Frankfurt have intercepted about half a dozen dubious shipments from various sources, including the Siemens parts that were stopped in early July. In most of the cases, the required export permit had not even been applied for.

Siemens is in the process of forming a joint venture for the peaceful use of nuclear energy with the Russians. Here, Siemens CEO Peter Löscher (left) is seen with Russian Prime Minister Vladimir Putin during a Nov. 9, 2009 meeting in Moscow.

Suspicious Shipments

Two shipments from Russia, containing computers, monitoring equipment and switch boxes, were intercepted in November and January. Atomstroyexport had engaged shipping companies to forward the products through Frankfurt Airport to Tehran and Bushehr. Lufthansa’s cargo subsidiary was the shipper in at least one of the cases. The order confirmation, which SPIEGEL has obtained, clearly identified Iran’s nuclear energy organization as the recipient.

A Lufthansa Cargo spokesman says that the company regrets the incident and points out that internal guidelines have since been tightened drastically. Nevertheless, the Frankfurt district attorney’s office is investigating as yet unidentified company officials on the suspicion of violation of Germany’s Foreign Trade Act.

The zealous customs officials discovered several other suspicious shipments in the months following the November and January incidents. In one case, the high-tech parts a Russian company had shipped from Moscow to Frankfurt were to be flown to Tehran after leaving Frankfurt Airport. Other problematic shipments were to be sent from Frankfurt to Moscow, then to Dubai and, finally, to Bushehr. Both options are banned under the EU’s Iran embargo. According to internal documents, the identity of the final recipient was sometimes covered up in an effort to fool German customs officials, but the approach didn’t always work.

Part of a Bigger Picture

Meanwhile, prosecutors in Frankfurt and the western state of North Rhine-Westphalia are investigating three German companies, among others, for possible violations of the Foreign Trade Act. Investigators have not yet revealed any names, partly for strategic reasons, but also in observance of the secrecy requirements applicable in such cases. However, Siemens, which may also have been deceived itself, is not yet a target in these investigations.

The dubious shipments German officials have uncovered to date are probably only part of a bigger picture. On its website, Atomstroyexport boasts that 12,000 tons of German parts have already been installed in Bushehr. Investigators must now determine which of those parts were installed long ago, when Siemens was still in charge of the reactor project, and which were procured more recently — and illegally.

Although Atomstroyexport spokeswoman Olga Zylova was not willing to comment on the incidents directly, she insists that her company “absolutely does not” support a possible nuclear armament program in Iran and is involved exclusively in the development of nuclear energy for peaceful purposes.

The German government and other European countries suspect that Iranian President Ahmadinejad is seeking to develop nuclear weapons under the guise of a civilian nuclear program, which Ahmadinejad vehemently denies. The Europeans fear that the Bushehr plant could be misused to build bombs. dpa

‘Illegal Actions’

Although officials with the German Customs Investigation Bureau in Cologne and the customs office at Frankfurt Airport are unwilling to confirm the reported incidents, they have unofficially admitted that various shipments were intercepted and that, in one case, customs officials refused to process a shipment altogether.

The customs officials’ persistent actions have even triggered resentment at the highest political levels. In April, a representative of the Russian Embassy in Berlin delivered a strictly confidential letter of protest from the government in Moscow to the German Foreign Ministry. In the letter, the Russian Foreign Ministry sharply criticizes what it calls the “illegal actions of German authorities.”

Soon afterwards, another note, worded even more sharply than the first one, arrived in Berlin. The way in which the Russian shipment was treated in Germany was “completely unacceptable,” the note reads.

In the letter, which is defined as a “non-paper” (an unofficial message, in diplomatic speak), the Russian envoys indirectly accuse the German government of interfering with the free exchange of goods. To support their argument, they cite the more generous UN agreement on sanctions against Iran, which, Moscow argues, permits direct shipments from Russia to Iran via Dubai, for example. For this reason, the Russians write, they cannot understand why German authorities have repeatedly stopped shipments in Frankfurt, even those coming from foreign manufacturers, thereby forcibly imposing their own, stricter EU rules on Russia.

Rogue Nations

A Siemens spokesman insisted that his company strictly abides by all EU sanctions against Iran. He added that the company will make a point of excluding Iran, as well as nuclear powers Pakistan and North Korea, from its planned joint venture with Rosatom. According to the spokesman, Siemens will place other rogue nations on its list of excluded countries if necessary.

It seems that if the Russians want to do business in those countries, they will, as is already the case in Iran today, have to make do without their future partner Siemens.

Translated from the German by Christopher Sultan