Swiss Energy Giant EGL Pursues Gas Deal with Iran

Benjamin Weinthal
12th August 2010 - Jerusalem Post

BERLIN – The Swiss energy group EGL's €18 billion gas contract with the National Iranian Gas Export Company faced criticism at a US congressional hearing in late July because of possible violations of American sanctions against firms active in Iran's gas and oil sectors.

"The Obama administration is required, under a new Iran sanctions law signed by the president in July, to investigate companies doing business with the Iranian regime," Mark Dubowitz, the executive director of the Washington-based Foundation for the Defense of Democracies, told The Jerusalem Post by e-mail on Tuesday.

"The Swiss energy giant EGL should be on the administration's target list over its €18b. gas deal with the Iranian regime," he said.

Dubowitz, an authority on energy sanctions, called for EGL "to be considered a candidate for sanctions" at the congressional hearing last month.

EGL would be wise to draw a lesson from the $536 million fine imposed by the US government on Credit Suisse, another Swiss company that decided to test US laws prohibiting business with Iran, Dubowitz told the Post in his e-mail.

"EGL should not want to be another example of Swiss complicity with a regime that is developing nuclear weapons, supporting terrorism and brutalizing its own people," he said.

Lilly Frei, a spokeswoman for EGL, told the Post, "We are not violating any regulations, and [we] follow rules; we feel we are not really deserving to come on the [sanctions] list."

Pressed about Teheran using the revenues from the EGL deal to finance terrorism and its allies Hamas and Hizbullah, Frei said, "That is speculation" about "money we would be paying" supporting terrorism. She said she "cannot really comment on such a speculation."

She added that EU sanctions were "evaluated by our advisers, [who said that] offtake of gas at the border would not fall under these sanctions."

Asked if the EGL legal advisers investigated an ownership connection between the Revolutionary Guard and the National Iranian Gas Export Company, Frei said that EGL does "not know if the Iranian Revolutionary Guard Corps is affiliated with National Iranian Gas Export Company."

When asked about the fresh round of enhanced EU, US and UN sanctions and their impact on the EGL contract, Adrian Sollberger, a spokesman for the Swiss Federal Department of Foreign Affairs, told the Post that the State Secretariat for Economic Affairs was responsible for the review of new Iran sanctions.

Sollberger later wrote by e-mail to the Post that the "Gas delivery contract is between EGL and Iran (not between Switzerland and Iran)."

He said that Swiss Foreign Minister Micheline Calmy-Rey "enabled and facilitated" the deal in 2008, but deferred the question as to whether the EGL contract violated UN, US and EU sanctions to Rita Baldegger, a spokeswoman for the State Secretariat for Economic Affairs.

Baldegger wrote by e-mail that "Switzerland will forcefully implement the UN Security Council sanctions. The Secretariat for Economic Affairs can only comment on these sanctions."

For "additional information, I have to refer you to the Federal Department of Foreign Affairs," Baldegger said.

When asked if EGL was violating its corporate code of conduct by pursuing the gas contract with Iran, EGL spokeswoman Frei told the Post that EGL adheres to "local laws and [the rules of the] international community.

"We have a contract with the company, not [with] Ahmadinejad," she said.

Tags

iran-sanctions, switzerland