Iran's Islamists don't think that the Bush administration will go beyond covert actions, "democracy assistance," and economic sanctions at this point. On this they agree with Noam Chomsky, and so do I (except you can never put any act of adventurism past Washington, so my confidence is not 100%).
On 7/31/07, ravi <ravi at platosbeard.org> wrote:
> On 31 Jul, 2007, at 0:06 AM, dredmond at efn.org wrote:
> > Fifteen minutes after the bombs start falling, the Iranians will
> > hand over 5,000 RPG-29s, 1,000 anti-air missiles and 3,000
> > long-range missiles to 20 million enraged Shiites. The resulting
> > carnage would make Dien Bien Phu look like a tea party. Just
> > too ugly to imagine.
>
> I am not sure about this... we hear this sort of thing over and over
> again: when we attacked Afghanistan the story was that we had no idea
> what we were in for, these guys were wily guerrilla fighters who
> would throw us out in short order. When that didn't happen and the
> Taliban ran to the borders, and BushCo turned on Iraq, we said...
> Iraq ain't no Afghanistan. Boy you have no idea what fierce fighters
> the Republican Guard are! Well, they turned out to be just the sort
> of cowards that the term (Republican) seems to be associated with
> back here. Now it's Iran... well, we say now, Iran ain't no Iraq,
> depleted by years of sanctions. They are a spirited people, willing
> to lay their lives down against foreign aggressors... and so on. I am
> sure there will be some carnage, but well within what the likes of
> Heritage Foundation classify as the messy affair of democracy blooming.
Since the empire's main tools against Iran are neither missile attacks (possible but unlikely) nor ground invasion (impossible now) but economic sanctions, "democracy assistance," and covert actions, what military hardware and capacity for conventional warfare Iran has is not yet relevant (and, Wojtek, Iran is not without hardware -- the Russians and the Chinese do not give away their goodies nowadays, but they have been willing to sell quite a few, and the Iranians have been able to pay for them -- unfortunately. neither Moscow nor Beijing would share with Tehran the best of what they got).
The most important questions are whether other countries* are willing to subvert formal and informal sanctions on Iran that Washington has been putting together and whether the Iranians are willing to make material sacrifices for their country's independence, such as tolerating gasoline rationing, which Iran's government would not have risked if it hadn't thought that Washington might use Iran's dependence on gasoline import against the country, and moderating factional divisions and class and other social conflicts, so as to deny the empire an ability to divide and conquer.
* <http://online.wsj.com/article/SB118547206362379113.html?mod=googlenews_wsj> China-Iran Trade Surge Vexes U.S. Friday, 27 July 2007 By Neil King Jr.
WASHINGTON -- The U.S. government says a handful of Chinese companies have ramped up shipments of sensitive military technologies to Iran, part of a surge in China-Iran trade that is complicating efforts to apply pressure on Tehran to rein in its nuclear program.
The State Department and its embassy in Beijing have lodged "numerous" formal protests with the Chinese government since the start of the year over the shipments, U.S. officials said. They said the goods have included a range of specialty metals and other dual-use items that could aid Tehran's missile and nuclear programs, with some cargoes going to Iran's main ballistic-missile producer. The U.S. argues that such trade is barred under a December United Nations sanctions resolution on Iran.
The Chinese government declined to respond to questions about the U.S. allegations. It has previously accused the U.S. of placing sanctions on Chinese companies based on scant evidence.
The growing dispute over China's burgeoning trade with Iran -- its exports to Iran in the first six months of this year surged 70% from 2006, to $3.2 billion -- comes at a sensitive time. The U.N. Security Council, which includes China as one of its five veto-wielding permanent members, is weighing whether to push ahead on a third resolution to impose tougher trade and financial sanctions on Iran over its uranium-enrichment work.
The U.S., Britain and some other European countries allege that Iran is pursuing nuclear weapons under the guise of a civilian power program, a charge Tehran denies. The U.N. has already imposed two sets of sanctions on Iran to get it to halt its nuclear program. These measures have ordered a freeze of the international assets of a major Iranian bank and 10 entities connected to the country's nuclear and missile programs, and imposed an embargo on Iranian arms exports, among other steps. Far from backing off, Iran has pressed ahead with its nuclear program.
The debate over how to proceed with Iran is likely to take center stage when world leaders meet in September for the annual U.N. General Assembly. China and Russia, another permanent Security Council member, appear increasingly leery of supporting sanctions that would strike at companies more central to Iran's economy or banking system.
China's controversial shipments to Iran, which coincide with a furor over defective Chinese exports to the U.S., also raise questions about Beijing's ability to control the transfer of potential weapons materials to countries under international scrutiny.
The U.S. has long accused China of supplying nuclear technology to countries such as North Korea, Pakistan, Iran and Libya. In recent years, though, Beijing has joined international nonproliferation agreements and imposed tougher rules on exports.
"This is no longer a government policy problem," said Joseph Cirincione, an arms-control expert at the liberal Center for American Progress. "It is a matter of China actually implementing the export controls it now has in place. It is a problem that many countries have."
In a classified incident this year, U.S. intelligence agencies tipped off authorities in Singapore about a container that was transiting through its port from China en route to Iran. Inside the container, Singaporean customs agents found large quantities of a chemical compound used to make solid fuel for ballistic missiles, U.S. and other international officials said.
More disturbing, U.S. officials said, was the intended recipient: the Shahid Bagheri Industrial Group, which is responsible for Iran's efforts to develop long-range missiles. The company was among the 10 entities targeted in the set of U.N. sanctions levied on Iran in December.
U.S. officials declined to name the Chinese company that was allegedly behind that shipment or the other companies allegedly behind other recent shipments. The officials said most of the questionable Chinese exports to Iran have come from five or six Chinese firms, all of which are under unilateral U.S. sanctions for allegedly shipping missile components and other restricted military equipment to Iran. Since 2005, the U.S. has imposed unilateral sanctions on nine Chinese companies believed to be engaged in such trade. The sanctions bar U.S. companies from doing business with any of these companies.
Companies the Bush administration considers "serial proliferators" to Iran include Beijing Alite Technologies Co., China Great Wall Industry Corp. and China National Precision Machinery Import/Export Corp. An official from Beijing Alite said the company's products "have nothing to do with military weapons" and that it stopped trading with Iran in 2003. A China Great Wall spokeswoman said the company "never had any business relationship with Iran." An officer at China National Precision declined to comment.
When the U.S. renewed sanctions on these companies last year for allegedly continuing shipments of sensitive materials to Iran, a Chinese Foreign Ministry spokesman said the U.S. had provided no clear evidence of wrongdoing and criticized the move as "groundless and extremely irresponsible."
For the White House, China's growing economic ties with Iran pose the biggest impediment to its strategy of combining incentives and economic pressure to get Tehran to back off its nuclear work. While many European companies and banks have begun to cut back their dealings with Iran, Chinese companies are surging ahead. A branch of China North Industries Group, or Norinco, China's huge state-owned defense-industrial manufacturer, just signed a deal valued at nearly $590 million to supply subway trains for Tehran's metro system.
U.S. officials said that in discussions with Beijing, Chinese officials have denied specific shipments violated U.N. resolutions or other international treaties. In other cases, they promised to investigate, but with no apparent follow-through. U.S. officials said China has clamped down in some instances. Don Mahley, a senior State Department official, told a congressional panel this month the U.S. was unable "to ascertain the level of control or awareness that Chinese officials have over increasingly freewheeling Chinese companies that trade in materials related to [weapons of mass destruction] and their delivery systems."
Bush administration officials said the U.S. is also monitoring shipments to Iran from companies in other countries, including Germany and Italy. They said Washington could move to impose U.S. sanctions on some of the companies in coming months.
<http://online.wsj.com/public/article/SB117495743693749812-siqnI8qlULM9hbMuAlzn4v7_q7s_20070425.html> Trading Outcry Intensifies Firms Face More Calls to Cut Ties With Censured Nations By PAULO PRADA and BETSY MCKAY March 27, 2007
(See Corrections & Amplifications item below.)
American companies that do business with countries subjected to U.S. trade sanctions face increasing financial and political pressure to stop as tensions between Iran and the United Nations Security Council worsen.
As a result, many companies are severing connections -- or plan to when current contracts end -- with customers in the 13 countries or regions penalized after the U.S. accused them of supporting terrorism, human-rights abuses or other unacceptable behavior.
The clamor spotlights how scores of U.S.-based companies manage to do business in sanctioned countries either through offshore subsidiaries or using export licenses granted by the Treasury Department. After seeing this traffic grow briskly for several years, companies now find lawmakers stepping up efforts to tighten restrictions and shareholders and fund managers steering investments away from countries in Washington's doghouse.
Companies whose foreign subsidiaries operate in a sector dominated by a sanctioned nation's government -- General Electric Co., Halliburton Co. and Dresser-Rand Group Inc. among them -- have faced particularly harsh criticism. Securities filings show many other U.S. corporations acknowledge their overseas units conduct such business, and the federal government last year fined at least a dozen U.S. companies for violating sanctions in Iran, Sudan, Cuba and elsewhere.
"It's questionable and shameful, if not treacherous, behavior," Sen. Frank Lautenberg said. As part of an Iran sanctions bill introduced in the Senate last week, the New Jersey Democrat included provisions that would ban subsidiaries of U.S.-controlled companies that lack a special export license from doing business in Iran. The new Democratic majority in Congress tilts the odds in favor of his effort, which failed as an amendment to three bills in previous sessions largely because of Republican opposition.
The growing scrutiny comes amid political and grass-roots pressure on U.S. investors, such as state pension funds, to dump shares of non-U.S. companies with major investments in energy businesses in Iran. Earlier this month, Republican Rep. Ileana Ros-Lehtinen of Florida introduced a bill calling for federal pension funds to sell shares of any company with more than $20 million in Iran's energy sector. Such companies include Royal Dutch Shell PLC, based in the Netherlands; Total SA of France and Russia's OAO Gazprom.
"We're concerned most about...companies that have financial relationships with a government, helping to develop oil fields and profits that are then turned around to support terrorism," said Sarah Steelman, state treasurer in Missouri, who oversees one of the country's first "terror-free" public investment funds, the $29 million Missouri Investment Trust.
Florida lawmakers are considering requiring the state's pension fund to sell any holdings in companies found to have ties to Iran's energy industry. A separate bill could force the pension fund to divest itself of 12 companies operating in Sudan, in protest of militia attacks terrorizing the Darfur region. And pension funds in at least seven other states already have sold stakes in U.S. companies linked to Sudan.
The exact number of companies doing business despite trade embargoes isn't clear, partly because federal officials won't disclose which companies are legally allowed to export to proscribed countries, citing a trade-secrets law. Among those known to have interests in Iran are GE, which services power plants through contracts set up by non-U.S. subsidiaries; Xerox Corp., which sells spare parts and supplies, though no longer sells copiers there; and Overseas Shipholding Group Inc., which operates tankers that at times dock in Iran and transport Iranian oil to other foreign buyers.
Many in business and industry oppose any tightening of sanctions laws, which already put them at a disadvantage with overseas rivals. "Foreign competitors are not dummies," said William Reinsch, president of the National Foreign Trade Council, a business group that promotes free trade. Sanctions can "destroy your reputation as a reliable supplier, and it's something that your foreign competitors will play up shamelessly with their customers."
U.S. exports to sanctioned countries surpassed $1.15 billion last year, according to the U.S. Census Bureau. Exports to Iran were $85 million, up from $8 million in 2001. Those figures don't count services such as consulting or revenue generated through subsidiaries in embargoed countries. Despite the increase, trade with Iran is at less than 20% of its volume in the early 1990s, before the Clinton administration tightened restrictions on sales or investments by U.S. companies.
"U.S. companies are generally happy to do business in these places because they want to build a relationship in case things thaw," said Adam Pener, chief operating officer of Conflict Securities Advisory Group Inc., a consulting firm that advises institutional investors on the risks of buying stakes in companies with exposure to countries linked to terrorism. "As soon as people start shining the light on these things, it's a no-brainer...to leave because you don't want to be seen as supporting or associated with terror."
[Chart] <http://online.wsj.com/public/resources/images/NA-AM420_SANCTI_20070326190431.gif>
Under U.S. law, makers of agricultural products, medicine, equipment and services can get licenses to legally export items as long as they are used for food, health or humanitarian purposes. But that definition is broad enough to include photography equipment, musical instruments, plastics and tobacco, according to the Census Bureau.
Companies without a license still can do business through foreign subsidiaries if those units are run separately from the U.S. parent and don't have any U.S. citizens as managers, directors or employees. But non-U.S. units can be difficult to monitor, and some critics claim they offer a huge trade loophole for American companies.
In filings with the Securities and Exchange Commission this year, various U.S. companies acknowledge their foreign subsidiaries conduct business in embargoed countries. A recent filing by heavy-machinery maker Dresser-Rand, for instance, notes that "some of these countries...are or previously have been identified by the State Department as terrorist-sponsoring states" and that "our reputation may suffer due to our association with these countries."
Natco Group Inc., a Houston maker of oil-and-gas-production equipment, said in a filing that subsidiaries in the United Kingdom, Japan and Canada "have made sales" and "expect to continue making sales...to customers in certain countries that are subject to U.S. government sanctions."
Dresser-Rand, of Houston, declined through a spokesman to comment. Calls to Natco seeking comment weren't returned.
Last year the Treasury Department's Office of Foreign Assets Control fined more than a dozen U.S. companies for violations. Supermicro Computer Inc., a San Jose, Calif., maker of computer servers, paid more than $450,000 in fines because the company, through a Dubai-based distributor, knowingly sold 300 computer motherboards in Iran. Howard Kalt, an investor-relations manager for Supermicro, says the company severed its relationship with the distributor and launched an "export compliance program," and that violations by the company "are all past tense now."
The heightened scrutiny has led some companies to say they will wrap up operations their subsidiaries conduct in sanctioned countries when they complete existing contracts.
Flowserve Corp., a supplier of pumps, valves and other equipment, gets 1% to 2% of its revenue from Iran, Syria and Sudan. The Dallas company is making "a voluntary withdrawal" from pursuing additional business there but "may continue to honor certain existing contracts, commitments and warranty obligations," according to a securities filing last month. A company spokesman, in an email response to questions about the decision, said "once these legally compliant warranties and contractual commitments expire, these subsidiaries will no longer do any business in these countries."
Such withdrawals can be slow, though. GE and Halliburton, for example, reacted to pressure by announcing in 2005 they would stop seeking new business in Iran. Yet neither has actually pulled out.
GE still has "long-term service agreements and maintenance agreements" for power plants and sells spare parts for oil and natural-gas projects there, spokesman Gary Sheffer said. Its Iran operations are handled through units in Austria, Canada, China, France, Italy and the U.K.
Halliburton is "winding up our work in Iran, and will exit upon the completion of existing commitments," spokeswoman Melissa Norcross wrote in an email.
--Neil King Jr. contributed to this article.
Write to Paulo Prada at paulo.prada at wsj.com and Betsy McKay at betsy.mckay at wsj.com
Corrections & Amplifications:
General Electric Co. says it will have no business dealings in Iran once its existing contracts there expire, except for humanitarian and other business activity licensed by the U.S. government. This article implies but doesn't specifically state this aspect of GE's intentions. GE says the contracts not covered by those U.S. licenses will have expired by the end of 2008.
-- Yoshie
