U.S. exports to Iran shot up even as Bush talked tough on sanctions

Associated Press | U.S. exports to Iran grew more than tenfold during President George W. Bush’s years in office even as he accused Iran of nuclear ambitions and helping terrorists. America sent more cigarettes to Iran under Bush – at least $158 million worth – than any other products.

Other surprising shipments to Iran during the Bush administration: brassieres, bull semen, cosmetics, fur clothing, sculptures, perfume, musical instruments. Top states shipping goods to Iran include California, Florida, Georgia, Louisiana, Michigan, Mississippi, New Jersey, North Carolina, Ohio and Wisconsin, according to an analysis by The Associated Press of seven years of U.S. government trade data.

That list includes some solidly conservative Republican states where Bush’s assertive foreign policy has been highly popular.

Despite increasingly tough rhetoric toward Iran, which Bush has called part of an axis of evil, U.S. trade in a range of goods survives on-again, off-again sanctions originally imposed nearly three decades ago. The rules allow sales of agricultural commodities, medicine and a few other categories of goods. The exemptions are designed to help Iranian families even as the United States pressures Iran’s leaders.

“Our sanctions are targeted against the regime, not the people,” said Adam Szubin, director of the Treasury Department’s Office of Foreign Assets Control, which enforces the sanctions. The government tracks exports to Iran using details from shipping records, but in some cases it is unclear whether anyone pays attention.

Sanctions are intended in part to frustrate Iran’s efforts to develop its military, but the U.S. government’s own figures show at least $148,000 worth of unspecified weapons and other military gear were exported from the United States to Iran during Bush’s time in office. That includes $106,635 in military rifles and $8,760 in rifle parts and accessories shipped in 2004, the data show.

Also shipped to Iran were at least $13,000 in aircraft launching gear and/or deck arrestors, equipment needed to launch and recover jets on aircraft carriers, according to U.S. records. Iran’s navy is not believed to own or operate any carriers.

Those numbers seem small, but military items can sell for pennies on the dollar compared with what the Pentagon paid. Last year, federal agents seized four F-14 fighter jets sold to domestic buyers by an officer at a California naval air station for $2,000 to $4,000 each, with proceeds benefiting a squadron recreation fund. When F-14s were new, they cost roughly $38 million each.

Szubin said it was unlikely exports of military gear occurred, but the government was looking into it to be certain after the AP raised questions. He said shipping records are subject to human error, such as citing wrong commodity codes or recording Iran as the destination rather than Iraq. The Treasury Department said Monday it was still checking to see whether it could offer an explanation.

“That’s something that would obviously concern us greatly and concern the whole administration,” Szubin said in an interview with the AP. “And so when you presented us with the question in the last day we have called over to our colleagues in other government agencies, and you can be assured they’re looking very carefully into it.”

Bush signed legislation this year to prohibit the Pentagon from selling leftover F-14 parts. The law was prompted by AP’s reports that buyers for Iran, China and other countries exploited Pentagon surplus sales to obtain sensitive military equipment that included parts for F-14 Tomcats and other aircraft and missile components. Two men were indicted in Florida last week on charges they shipped U.S. military aircraft parts to Iran including Tomcat and attack-helicopter parts.

Iran received at least $620,000 in aircraft parts and $19,600 worth of aircraft during Bush’s terms. Iran relies on spare parts from other countries to keep its commercial and military aircraft flying. In some cases, U.S. sanctions allow shipments of aircraft parts for safety upgrades for Iran’s commercial passenger jets.

The U.S. government seems uncoordinated on efforts to limit trade with Iran.

The Securities and Exchange Commission sought to shine a light on companies active in Iran or four other countries the State Department considers state sponsors of terror, but stopped after business groups complained. The Treasury Department allowed some companies and individuals suspected of illegal trading with Iran to escape punishment. Yet the Bush administration also has collected millions of dollars in fines from trade-rule violators while pressing Congress without success to pass laws to strengthen enforcement.

The United States sent Iran $546 million in goods from 2001 through last year, government figures show. It exported roughly $146 million worth last year, compared with $8.3 million in 2001, Bush’s first year in office. Even adjusted for inflation, that is more than a tenfold increase.

Exports to Iran are a politically loaded but tiny part of U.S. trade. The United States counted more than $1 trillion in world exports last year. The value of U.S. shipments last year to Canada, America’s top trading partner, was more than 1,000
times higher than to Iran.

Top U.S. exports to Iran over Bush’s years in office include corn, $68 million; chemical wood pulp, soda or sulphate, $64 million; soybeans, $43 million; medical equipment, $27 million; vitamins, $18 million; bull semen, $12.6 million; and vegetable seeds, $12 million, according to the AP’s analysis of government trade data compiled by the World Institute for Strategic Economic Research in Massachusetts.

Also getting Bush administration approval for export to Iran were at least $101,000 worth of bras; $175,000 in sculptures; nearly $96,000 worth of cosmetics; $8,900 in perfume; $30,000 in musical instruments and parts; $21,000 in golf carts and-or snowmobiles; $4,000 worth of movie film; and $3,300 in fur clothing.

Few people or companies asking U.S. permission to trade with Iran are turned down by the Treasury Department, the lead agency for licensing exports to sanctioned countries.

During Bush’s terms, the office has received at least 4,523 license applications for Iran exports, issued at least 2,821 licenses and 213 license amendments and denied at least 178, Treasury Department data show.

Neither the Treasury data nor trade data compiled by the Census Bureau identify exporters or specify what they shipped. AP requested those details under the Freedom of Information Act in 2005 and still is waiting for the Treasury Department to provide them.

The Bush administration’s record enforcing export laws is mixed. The Office of Foreign Assets Control let the statute of limitations expire in at least 25 cases involving trade with Iran from 2002 to 2005, according to one internal department audit. The companies involved, disclosed to the AP under the Freedom of Information Act, include Acterna Corp., American Export Lines, Parvizian Masterpieces, Protrade International Corp., Rex of New York, Shinhan Bank, Phoenix Biomedical Corp., World Cargo Alliance and World Fuel Services.

Abdi Parvizian of the Parvizian Masterpieces rug gallery in Chevy Chase, Maryland, said his case was dropped because his business proved everything was imported from Iran legally. He bristled over current congressional proposals to ban imports from Iran, including carpets.

“The problem with the rugs is it has nothing to do with the government of Iran,” Parvizian said. This is something that is made by the very unfortunate people in the country, and those people are going to get hurt more than anybody else.

World Fuel Services said an employee fueled a ship out of Singapore that turned out to be Iranian-owned, and the U.S. government spotted it from a wire transfer. The company explained the mistake to Treasury with no repercussions, said Kevin Welber, general counsel of the company’s marine business. It has since put in place techniques to identify Iranian-owned ships, which Welber said can be difficult because some Iranian ships sail under Cyprus flags.

Phoenix Biomedical acknowledged it shipped surgical shunts to Iran without a license. It previously was allowed during the Clinton administration to send them to Iran and sent replacement shunts without a new license, which was required, said Charles Hokanson, who sold Phoenix Biomedical to French-based Vygon and is now chief executive of Vygon USA. He said that was the last business it did with Iran.

The other companies did not respond to requests by AP for explanations.