Hartford Courant: United Technologies Corp. disclosed in regulatory filings Friday that one of its foreign businesses worked on the security system for the Paris branch of Iran’s national bank, an entity singled out under U.S. economic sanctions against the Middle East country. The Hartford Courant
By BRIAN DOWLING
United Technologies Corp. disclosed in regulatory filings Friday that one of its foreign businesses worked on the security system for the Paris branch of Iran’s national bank, an entity singled out under U.S. economic sanctions against the Middle East country.
Delta Security Solution’s business with the Bank Melli Iran’s Paris branch amounted to $7,582 in 2012 and 2013, a portion of which occurred after President Barack Obama signed an executive order last October limiting U.S. companies and their foreign subsidiaries from “engaging in any transaction, directly or indirectly, with the Government of Iran.”
According to securities filings, UTC reported sales of about $3.59 million over the past two years to banks, insurance companies, oil companies and embassies controlled or owned by the Iranian government. All of the sales were through foreign subsidiaries of the Hartford-based company, which declined to comment further on the sales.
Though the sales amount to a sliver of UTC’s annual revenue, they underline just how difficult a task U.S. companies and their overseas affiliates have complying with the expanded sanctions against Iran.
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In the past two months, a group of about two dozen companies — including Costco, Toyota, Oracle, Vodafone, Sony and FedEx — have filed similar notices.
The United States has long limited trade with Iran to slow or halt the country’s development of nuclear weaponry as well as discipline it for supporting organizations listed as terrorist groups by the United States. President Barack Obama issued an executive order last October expanding trade sanctions in Iran to foreign subsidiaries of U.S. companies.
Jonathan M. Epstein, a partner at Holland & Knight in Washington D.C. who practices international trade law, said that the fact that UTC has ended the contracts should help it avoid sanctions.
“The winding down of something that was previously lawful and is suddenly unlawful would be a major mitigating factor,” he said, adding that the company’s actions “may very well just result in a warning letter.”
The Treasury Department encourages companies to voluntarily disclose past violations and considers those disclosures to be mitigating factors if the trade violation advances to civil proceedings against the company.
The Paris-based subsidiary that did the security work, Delta Security Solutions, is owned by UTC Climate, Controls & Security. This year and last, it “provided remote monitoring of the Paris branch’s electronic alarm system as well as related maintenance services to verify the proper functioning of the branch’s intrusion detection equipment,” the filings said.
When the work contracts were signed in August 2010, neither the business agreements nor the services were prohibited by law, UTC said in its filings.
In addition to reporting the business to the U.S. Securities and Exchange Commission, UTC Climate, Controls & Security filed this information with the Treasury’s Office of Foreign Assets Control, as it has in all of these cases.
Delta Security has terminated the contracts with the bank and “does not intend to do any further business with Bank Melli Iran,” UTC said in filings.
UTC also reported in April that another subsidiary sold fire safety equipment, including fire blankets, extinguishers, stands and spare parts, to the London office of the Bimeh Iran Insurance Company, another Iranian-controlled business.
In February, UTC reported that two other subsidiaries, Simtronics and Water Mist Engineering AS, sold $3.51 million in fire detection and suppression equipment to the Pars Oil & Gas Company, a firm controlled by Iran.
Also that month, the company reported that a foreign affiliate of Otis conducted service and maintenance at a number of Iranian “diplomatic premises” in France, Kuwait and Hungary. That work amounted to $74,500.