2 Indian cos among 7 firms face US sanctions

Washington, Aug 5: The United States has imposed sanctions against seven foreign companies, including two each from India, Russia, North Korea and one from Cuba, accusing them of passing on sensitive technology to Iran that could be used to develop weapons of mass destruction.

The action comes under US legislation, Iran Non-Proliferation Act of 2000, that aims to prevent sales to Iran of equipment that can be used in missile systems or weapons of mass destruction.

All the seven companies, including the two Indian companies, Balaji Amines Ltd and Prachi Poly Products Ltd, both chemical manufacturers will be barred from doing business with the US government or acquiring American high-technology items under the sanctions announced yesterday in the US government's official journal, the Federal Register.

The sanctions are the latest to be imposed under the Iran Non-Proliferation Act of 2000, which provides penalties for sales to Iran of ballistic missile technology and other items that could contribute to Iranian weapons of mass destruction program. The seven companies were found to be in violation of the Iran Non-proliferation Act of 2000, the law aimed at preventing the spread of weapons of mass destruction to Tehran. This law also requires the Bush administration to submit a report every six months to the US Congress naming the companies that have been sanctioned for their business dealings with Iran.

Tensions between the US and Iran are at a peak now with Tehran's nuclear effort and its refusal to heed to international opinion and its open support for Hezbollah, the militant group at war with Israel in southern Lebanon.

The US penalties, to be in place for two years, are likely to have little or no effect on the North Korean and Cuban firms, which have no known dealings with the United States.

But they could have a substantial impact on the two Indian companies -- chemical exporters Balaji Amines and Prachi Poly Products -- and the Russian firms, aircraft maker Sukhoi and Rosoboronexport which is the state agency for export of Russian military hardware.

The US announcement provided no particulars on the sales or dealings that invited the sanctions, though the Bush administration has complained publicly about a one billion dollar military deal signed in December under which Moscow is providing Iran with advanced ''Tor'' anti-aircraft missiles and helping modernise the Iranian air force.

The sanctions could affect a three-year-old agreement under which Sukhoi, best known for its military fighter jets, is working with the US aerospace giant Boeing to produce a new Russian regional passenger jet.

Even though the sanctions report was known, though not made public, the timing of the release of the sanctions action comes at a sensitive moment for the Bush administration, which is trying to push through Congress its plan to sell civilian nuclear technology to India. In addition, the US is trying to seek Moscow's help to pressure Iran and North Korea to abandon their nuclear programmes.

Talking to reporters yesterday, State Department Deputy spokesman Tom Casey stressed that the sanctions move was aimed at foreign companies, not the governments, and underlined the Bush administration's determination to combat weapons proliferation.

''This is a matter of US law. Non-proliferation is, you know, if not the highest certainly one of the highest priorities that we have. We're very serious about it. We're serious about following this law, and the decisions rendered here, which were taken after a lot of thorough and careful review, are reflective of that,'' he said.

A prominent Democrat in the House of Representatives, Edward Markey of Massachusetts said the action against the Indian companies raises questions about the Bush administration's landmark agreement with India to share civilian nuclear technology.

However State Department spokesman Casey defended the Indian government's non-proliferation record, saying it has a good regime in place and been cooperating with the United States, and said it is taking actions under the civil nuclear deal to further strengthen export controls.

A staunch critic of the US-India civil nuclear deal, Mr Markey said the alleged actions by the Indian firms suggest the New Delhi government cannot be trusted to fully ''police'' what he termed ''bad actors'' under its jurisdiction helping Iran.

Mr Markey, who knew about the sanctions weeks ahead, had criticised the Bush administration for not disclosing the activities of the firms before the House approved the civil nuclear deal last month. The list of sanctioned parties was weeks overdue, but State Department officials insisted the delay had nothing to do with the House vote.

The list was turned over to the House International Relations Committee a day after the House vote. The Senate has yet to approve the nuclear pact.

The sanctions, which went into effect on July 28, were imposed under the Iran-Syrian Non-Proliferation Act because there was ''credible information'' they had transferred to Iran equipment and/or technology on export control lists. According to the Federal Register a determination has been made that these seven entities have engaged in activities that require the imposition of measures pursuant to Section 3 of the Iran Non-proliferation Act of 2000, which provides for penalties on entities for the transfer to Iran since January 1, 1999, of equipment and technology controlled under multilateral export control lists (Missile Technology Control Regime, Australia Group, Chemical Weapons Convention, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction (WMD) or cruise or ballistic missile systems.

The Federal Register also spelt out the sanctions on these entities as follows: 1. No department or agency of the United States Government may procure, or enter into any contract for the procurement of, any goods, technology, or services from these foreign persons; 2. No department or agency of the United States Government may provide any assistance to the foreign persons, and these persons shall not be eligible to participate in any assistance program of the United States Government; 3. No United States Government sales to the foreign persons of any item on the United States Munitions List (as in effect on August 8, 1995) are permitted, and all sales to these persons of any defence articles, defence services, or design and construction services under the Arms Export Control Act are terminated; and 4. No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended.

These measures would be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise. A new determination will be made in the event that circumstances change in such a manner as to warrant a change in the duration of sanctions.

UNI

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