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Firms Reported to Have Sold Iran Refined Petroleum Products or Engaged in Commercial Activities in Iran's Energy Sector

GAO Report released on
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Summary Below is the official summary. The full report (PDF) is also available.

What GAO Found

Our reviews of open sources published between January 1, 2009 and September 30, 2012 identified a total of 17 foreign firms that were reported to have sold refined petroleum products to Iran during that same time period. Our review of open sources published from January 2012 through September 2012 indicated that only 1 of these 17 firms--Sytrol--was reported to have sold refined petroleum products to Iran during that same time period. In addition, our open source review and communication with firms indicated that 12 of the 17 firms were reported to have stopped selling these products to Iran before September 30, 2012; however, our review did not identify sufficient information to indicate either that the remaining 4 firms had continued to sell or ceased selling refined petroleum products to Iran at some point between January 1, 2012 and September 30, 2012.

Our reviews of open sources published from January 1, 2005 through September 30, 2012 identified a total of 42 foreign firms that were reported to have had commercial activity in Iran's energy sector during that same time period. Our review of open sources published from June 1, 2011 to September 30, 2012 indicated that 7 of these 42 firms were reported to have engaged in commercial activities in Iran's energy sector during that same time period. In addition, our open source review and communications with firms indicated that 19 of the 42 were reported to have withdrawn from commercial activities in Iran by June 2011, and 8 more had withdrawn from such activities as of September 30, 2012; however, our review did not identify sufficient information to indicate either that the remaining 8 firms had continued or ceased engaging in commercial activity in Iran's energy sector at some point between June 1, 2011 and September 30, 2012.

Why GAO Did This Study

Iran's involvement in illicit nuclear activities, support for terrorism, and abuse of human rights have led the United States, as well as other nations, to impose multiple sanctions in an attempt to curb these activities. According to the Department of State (State), the sanctions are intended to, among other things, target sectors of the Iranian economy relevant to its proliferation activities and block the transfer of weapons and technology related to Iran's missile and nuclear programs. In authorizing sanctions on entities engaging in certain transactions in Iran's energy sector, Congress declared that it is the policy of the United States to deny Iran the ability to support proliferation and terrorism by limiting the development of Iran's energy sector. The Secretary of State is responsible for determining whether a firm should be sanctioned for its activities in Iran's energy sector.

The United States has imposed these sanctions through various legislation and executive orders, including the Iran Sanctions Act of 1996 (ISA). On July 1, 2010, the President signed into law the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, which added new activities for which entities can be sanctioned under ISA. As amended by CISADA, ISA provides for sanctions to be imposed against persons, including foreign firms, who engage in certain activities in Iran's energy sector, including selling or providing Iran with refined petroleum products or investing more than $20 million in thedevelopment of Iran's petroleum resources. On August 10, 2012, the President signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHRA), which further amended ISA in part by increasing the number of activities for which entities can be sanctioned.

ITRSHRA also requires GAO to submit to the Congress a report "listing foreign investors in Iran's energy sector" for the period beginning on January 1, 2009. The list is "to include entities that exported gasoline and other refined petroleum products to Iran," and "entities involved in commercial transactions of any kind, including joint ventures anywhere in the world, with Iranian energy companies." In response to this requirement, this report identifies (1) firms reported in open sources published between January 1, 2009 and September 30, 2012 to have sold refined petroleum products to Iran during that same time period; and (2) firms reported in open sources published between January 1, 2005 and September 30, 2012 to have had commercial activities in Iran's energy sector during that same time period. In addition, we list the status of each firm's activity as of September 30, 2012. ITRSHRA did not ask us to attempt to determine whether the activities for which the firms are listed in our reports met the legal criteria for sanctionable activities under the ISA, as amended. We plan to issue a report in 2013 that will address other aspects of our reporting requirement under this provision of the ITRSHRA legislation.

For information, contact Thomas Melito at (202) 512-9601 or melitot@gao.gov .