POREG VIEW: The New York Times reports that American governments have been allowing business dealings with Iran, China, North Korea and other countries blacklisted as state sponsors of terrorism to meet ‘humanitarian ends’ and to ‘fulfill the foreign policy goals’. 

The report cites several instances when Washington wilted under political pressure and yielded to persuasion of lobbyists.  To say that such sales muddled the US moral and diplomatic authority is to say the obvious. But the practice is in sync with the sanctions regimes the world is familiar with right from the days of Ian Smith’s Rhodesia.

All that the US had allowed were not big ticket items though. They ranged from cigarettes, Wrigley’s gum, Louisiana hot sauce, and Jolly Time popcorn to weight-loss remedies, body-building supplements and sports rehabilitation equipment.  

American companies and banks also acted as go between for delivery of a Chinese lathe to Iran for use in the making of nuclear centrifugal parts, and for import of graphite electrodes from the blacklisted China Precision Machinery Import Export Corporation for use in a medical – waste disposal plant set up by a naturalized Chinese businessman in Honolulu.  Interestingly, the US administration repeatedly penalized this very same Chinese company for providing missile technology to Pakistan and Iran.

The NYT story clearly brings out another American home truth.  The sanctions laws are deliberately worded vaguely to facilitate balancing of sanctions policy against the realities of the business world.

As a Treasury Under Secretary said, the 2000 law allowing agricultural and medical exceptions to sanctions was, for instance, the product of economic stress and political pressure. American farmers, facing sharp declines in commodity prices and exports, hoped to offset their losses with sales to blacklisted countries.

Any lingering doubts are set at rest by another nugget which makes clear that for the modern salesman colour of the currency or end use application is of no concern as long as hefty returns are assured on the sales. American exports to Iran, virtually non-existent before the law’s passage, have totaled more than $1.7 billion since.

Whether the United States did far less business with Iran than did China or Europe is not the issue. Because, Washington’s much hyped sanctions have not hurt its business interests and ensured it a share in the Iranian pie.

Old timers may frown upon the practice and expect the high priest of democracy to remain perched on the high moral pedestal. But as the Tinners case shows the US indulges in bizarre practices which defy conventional wisdom.

Friedrich Tinner and his two sons, Urs and Marco, helped AQ Khan, Father of Pakistan bomb run his nuclear Wal-Mart and served the CIA as double agents. A Swiss magistrate has recommended charging the Tinners with trafficking in technology and information for making nuclear arms.

It is not immediately clear whether the government in Bern heeds the advice. But the very prospect of a prosecution and a public trial threaten to be more damaging than the disclosures in the WikiLeaks cables.