The Wall Street Journal (Europe) publishes an article today outlining the ways that European businesses (and compliant regulators and governments) are enabling Iran to build the bomb. . While diplomats here might offer reassurances, the reality is quite different. The sanctions regime is failing; but it is worse than that-businesses are actively assisting the mad mullahs of Tehran. The EU is within missile range of Iran-what are these people thinking?
The Austrian oil giant OMV is itching to implement a €22 billion agreement signed in April 2007 to produce liquefied natural gas from Iran's South Pars gas field; at last May's annual shareholder meeting, Chief Executive Officer Wolfgang Ruttenstorfer said OMV was only waiting for "political change in the U.S.A." Raiffeisen Zentralbank, Austria's third-largest bank, is active in Iran and, according to a story by the Journal's Glenn Simpson last February, has absorbed the transactions of key European banks that shut down their operations in Iran. And in late January Paolo Scaroni, CEO of Italian energy corporation Eni SpA, told the Associated Press that his firm will continue to fulfill its contractual obligations in Iran and feels no external pressure to sever ties with Iran's energy sector.
Yet because of the sheer volume of its trade with Iran, Germany, the economic engine of Europe, is uniquely positioned to pressure Tehran. Still, the obvious danger of a nuclear-armed Iran has not stopped Germany from rewarding the country with a roughly €4 billion trade relationship in 2008, thereby remaining Iran's most important European trade partner. In the period of January to November 2008, German exports to Iran grew by 10.5% over the same period in 2007. That booming trade last year included 39 "dual-use" contracts with Iran, according to Germany's export-control office. Dual-use equipment and technology can be used for both military and civilian purposes.
Human rights groups should also be concerned. A nation that has a history of spying and repressing its own people now seeks to profit from technology geared towards allowing Iran to do the same:
Siemens and its joint partner, Nokia, had delivered state-of-the-art communications surveillance technology to Iran last spring.
Information-technology experts say that the companies' "monitoring centers" are used to track mobile and land-line telephone conversations, and that their "intelligence platform" systems allow the Iranian secret service to track financial transactions and airplane movements. The technologies could also be used to monitor persecuted minority and dissident groups in Iran.
All of this is taking place while Iran is moving at an astonishing pace to process high-grade uranium for its atomic bomb. Iran's launch of its first domestically produced satellite on Tuesday prompted an alarmed French Foreign Ministry spokesman Eric Chevallier to underscore the link between Iran's military nuclear capability and its compatibility with the satellite technology.
Trade and security experts assert that Iran cannot easily replace high-tech German engineering technology with that from competitor nations such as China and Russia. The hollow pleas by Chancellor Angela Merkel, who favors a policy of moral pressure to convince corporations to be "sensitive" about cutting new deals with the regime in Tehran, did not prevent her administration from approving over 2,800 commercial deals with Iran in 2008.
The governments are trying to hide the deals with Iran:
Transparency is badly needed in this area. The German Federal Office of Economics and Export Control (BAFA) refuses to disclose the nature of these agreements. Economics Minister Michael Glos, who oversees BAFA and is considered an advocate of trade with Iran, should reveal the names of the firms commencing trade with a country that sponsors terror organizations such as Hezbollah and Hamas. The German firms are hiding behind a wall of nondisclosure to avoid being blacklisted on the U.S market.
German legislation prohibiting trade with Iran, coupled with an immediate cessation of credit guarantees, would decisively setback, if not stop, Iran's nuclear weapons program and set an invaluable example for other EU countries to adapt for their own companies.
Don't hold your breath.