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GE Says No New Business in Iran

Reuters
Feb 2nd, 05

BOSTON (Reuters) - Faced with political pressure over its business ties in Iran, General Electric Co. said on Wednesday it would not accept any new business there, citing "uncertain conditions" in the country.
"Senior management and the board decided in mid-December to discontinue taking new orders because of uncertain conditions relating to Iran," said Gary Sheffer, executive director of communications and public affairs at GE.

Sheffer declined to elaborate on the meaning of "uncertain conditions."

U.S. politicians have been critical of American companies doing business in Iran through foreign subsidiaries, saying such methods violate the intention of trade sanctions against the Islamic republic.

Iran and Washington broke ties in 1980 after diplomatic attempts failed to free hostages taken in 1979 when militant students overran and occupied the U.S. embassy in Tehran.

Tensions between the two governments have been fueled in recent months by tough talk from President Bush's administration, which has accused Iran of seeking nuclear weapons and funding terror groups.

The company's announcement follows similar moves by U.S. oilfield services conglomerate Halliburton Co. and British oil major BP Plc (BP.L: Quote, Profile, Research) .

Halliburton recently won a contract to drill part of Iran's giant South Pars gas field in the Gulf, but it said this month it would not seek further new business there.

GE sells energy products and services and medical diagnostic equipment in Iran. Most of its business there relates to the oil and gas industry.

"Our subsidiaries have been around for many, many decades and have done business in Iran in full compliance with the law," said Sheffer.

The company plans to complete existing projects in Iran, which should take about a year, he said.

GE, the world's biggest company by market capitalization, generated revenue of $270 million -- or less than 1 percent of the company's total sales -- in Iran last year with both private and government customers.

On Wednesday, Tehran's chamber of commerce said it was in talks with its U.S. counterpart to set up a joint chamber that could facilitate trade between Iran and the United States, despite political antagonism. The U.S. Chamber of Commerce in Washington could not immediately confirm any such discussions between the two chambers.

The United States has imposed trade sanctions on Iran, but has exempted some of Iran's main non-oil exports from the embargo and buys Iran's carpets, pistachio nuts, shrimp and caviar.

U.S. law prohibits companies, but not their foreign subsidiaries, from doing business with nations sponsoring terrorism.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7517834