Wall Street Journal Europe: As Siemens pulls out of the Islamic Republic, are Merkel's sanction threats real this time? The Wall Street Journal (Europe)
As Siemens pulls out of the Islamic Republic, are Merkel's sanction threats real this time?
Siemens, Europe's largest engineering group with sales of about €400 million a year to Iran, said Tuesday that it will sever its business ties with the Islamic Republic. Also on Tuesday, Chancellor Angela Merkel repeated to Israeli President Shimon Peres a pledge she had made to Prime Minister Benjamin Netanyahu a week earlier: Germany will push for tougher U.N. sanctions against Tehran and is even prepared to go it alone with "like-minded countries" if the Security Council can't reach an agreement.
So is Germany finally prepared to do its part in preventing a nuclear-armed Iran? Let's hope so. In 2008, Germany's exports to the Islamic Republic rose 9% over the previous year to €3.92 billion ($5.49 billion), according to Eurostat figures, cementing Germany's position as Iran's largest European export partner. In 2009, Germany's Federal Office of Economics and Export Control German approved more dual-use deliveries to Iran (48) than in 2008 (39).
Siemens, meanwhile, won't actually sever its Iran ties completely—and certainly not right away. Existing contracts will be honored and the company is still waiting to hear back from the mullahs about the bids it submitted before October. This means it really will stop accepting new orders from Iran only in mid-2010.
The company also has more reasons than most German companies to try to improve its tarnished image. Its joint venture with Finland's Nokia delivered telecommunications technology to Iran that the regime probably used to spy and crack down on protesters, as this newspaper reported in June. Der Spiegel reported last month on a government probe into Siemens's exports of turbo compressors that investigators believe could be used in Iran's missile program. The company confirmed to us the delivery of the goods but denied any investigation or violation of export rules.
In the same article, Der Spiegel reported that the British Navy stopped a ship from China that was carrying so-called Teleperm automation technology made by Siemens and intended for the Iranian company Kalaye Electric. The U.S. Treasury added Kalaye Electric in 2007 to its sanctions list due to the company's links to Iran's nuclear program. The computers, according to the German magazine, can be used to run nuclear power stations. Siemens confirmed to us the delivery of "customary industry computers" to China, insisting that "at no time was there any indication (that the equipment could be) diverted to Iran."
Still, Siemens's announcement is a sign of progress. Equally promising are the more muscular statements coming from Europe's biggest Iranian trading partner—Italy. Foreign Minister Franco Frattini, who only earlier this month warned against "burning bridges" with Iran, is now also calling for tougher sanctions. Furthermore, he told visiting U.S. Secretary of State Hilary Clinton on Monday that Eni, Italy's largest energy company, will stop doing business with Iran. This about-face came exactly 10 days after these pages published an exposé by Italian journalist Giulio Meotti, detailing the extensive involvement of Italian companies with the regime's Revolutionary Guard and the supply of industrial equipment and space technology to Iran.
So maybe Europe is finally getting serious. French President Nicolas Sarkozy, whose country will take over the Security Council Presidency next month, has been calling for tougher action for some time. If he and his European partners can deliver on that, they will at last show a capacity for global leadership that goes beyond the usual hollow declarations.