US Approved Business with Iran, Other Blacklisted Nations

The New York Times is reporting the U.S Treasury Department has granted nearly 10,000 exceptions to American companies over the past 10 years so they could do business with Iran and other countries blacklisted by the U.S. as state sponsors of terrorism.

In a story posted Thursday on the Times website, the newspaper said companies such as Kraft Food and Pepsi, and some large U.S. banks, benefited from the exceptions to U.S. sanctions rules.

Most licenses were granted under a 2000 law allowing agricultural and medical humanitarian goods to be exempted from sanctions. The exempted products included cigarettes and chewing gum.

The Times story implies no illegal activity by U.S. officials or company personnel.

The Treasury Department is defending its decision to grant the special licenses. News organizations - The Washington Post, Reuters - quote an unnamed Treasury official as saying all of the licensing decisions advanced U.S. "national security and foreign policy goals."

In reference to Tehran, the official says allowing food and medical exports is consistent with U.S. objectives "of not hurting the Iranian people."

The three-year Times investigation said some U.S. companies dealt with Iranian firms suspected of terrorist involvement or weapons proliferation. The exceptions also included banned entities from other countries, including North Korea and China.

In one case cited by the Times, a U.S. company was allowed to deal with a Chinese government-owned firm - China Precision Machinery Import Export Corporation - that had been penalized repeatedly for providing missile technology to Pakistan and Iran.

In the article, U.S. Treasury Undersecretary Stuart Levey noted that the permitted trade to blacklisted counties was inconsequential compared with the broad scope of U.S. sanctions. He said goods sold to Iran, for example, amounted to only 0.02 percent of all U.S. exports in the first quarter of 2010.

U.S. sanctions enforcement rests with a Treasury Department office that can make exceptions based on guidance from the State Department. After the Times filed a federal Freedom of Information lawsuit, the U.S. government agreed to turn over a list of companies to the newspaper that had been granted exceptions under the law.

Some information for this report was provided by AP.