PARIS, Dec 1 (Reuters) – Patricia Russo, chief executive of the freshly merged Franco-U.S. group Alcatel-Lucent, will be barred, as a U.S. citizen, from doing business with Iran, she said on Friday.
She did not say, however, if this would create problems for the Paris-based company which has enjoyed long-standing business relationships with Iran.
The French company upgraded Tehran’s telecoms networks in a contract won in 2001, built Iran’s first high-speed DSL Internet network and has been providing some communications systems for gas plants there.
“I am forbidden by law from being involved in business in Iran,” Russo said on the sidelines of a press conference in Paris to mark the first day the two companies operated as a combined group.
“Clearly we have to respect U.S. laws for U.S. citizens and so U.S. citizens cannot participate in business done in U.S.-sanctioned countries,” Russo added.
The U.S. is calling for the U.N. Security Council to impose sanctions on Iran after it failed to heed a demand to halt uranium enrichment work, a process that can be used to make fuel for nuclear power plants or material for warheads.
“If Alcatel were to actively pursue business with Iran it could create tensions between the U.S. and France at a time when the U.S. is trying to bring France into supporting sanctions against Iran,” said Antonia Handler Chayes, professor at the Fletcher School of Law and Diplomacy in Boston and former Under Secretary of the U.S. Air Force under the Carter Administration.
Lucent has numerous classified defence and other contracts with the U.S. government, which raised some concerns among senators about national security.
The Committee on Foreign Investment in the United States (CFIUS) recommended that President George W. Bush approved Alcatel’s acquisition of Lucent but with a few agreements in place.
One of them was that the administration could reopen the review of the deal if the company materially failed to comply with security conditions.
It would allow it to “revise any recommendations submitted to the President,” according to a Nov. 20 filing with the U.S. Securities and Exchange Commission.
Some U.S. lawyers said on Friday they did not expect the merger between Lucent and Alcatel and Russo’s nationality to create problems but suggested the two companies tread carefully.
Alcatel-Lucent’s legal department was not available for comment on Friday.
“Alcatel can’t use her to do business in Iran,” one professor of international law, who did not wish to be identified, said on Friday.
He suggested Alcatel-Lucent would probably come up with some structure so that she (Russo) had nothing to do with Iran dealings.
A New-York based lawyer, involved in international corporate law, who also did not wish to be identified, said: “There are legal ways they can do business with Iran, through a subsidiary for example.”
