US has allowed business with blacklisted countries: report

WASHINGTON // President Barack Obama’s administration has permitted US firms to do business worth billions of dollars with Iran and other countries that have been officially blacklisted, a report said on Friday.

Some 10,000 deals have been allowed under a loophole that permits humanitarian aid despite the sanctions, allowing US companies -- including food giants Kraft and Mars -- to get around economic blacklists for countries designated as state sponsors of terrorism, the New York Times said.

This year the international community, especially the Obama administration, has ramped up pressure on Tehran over its nuclear program, blacklisting even more Iranian individuals and firms under an extended economic embargo.

Yet according to the Times report, an office at the US Treasury Department has granted licenses via a 10-year-old law that exempts humanitarian aid, both agricultural and medical.

The broadly-written language of the loophole, opened wider by industry lobby groups in recent years, has seen the term "humanitarian aid" extended to companies exporting items as diverse as cigarettes, chewing gum, Louisiana hot sauce and body-building supplements.

In a three-year investigation involving a Freedom of Information lawsuit filed against the Treasury and its Office of Foreign Assets Control, the Times were given heavily redacted documents outlining the deals.

The office's director Adam Szubin defended its actions, telling the Times: "I haven't seen any licences that I thought we should have done differently."

Since the humanitarian aid law, a loophole passed in 2000, US exports to Iran have totaled more than $1.7 billion, according to the documents.

On the Wrigley's chewing gum, owned by food giant Mars, a former sanctions advisor told the Times: "We debated that one for a month. Was it food? Did it have nutritional value? We concluded it did."

But Hal Eren, who used to work at the Treasury licensing office, admitted to the Times: "We were probably rolled on that issue by outside forces," apparently referring to industry lobbyists.

The newspaper detailed another incident in which a Hawaii businessman sought to import 200 graphite electrodes for a medical waste treatment plant from a Chinese firm penalized for providing missile technology to Pakistan and Iran.

Two days after the order was placed in July 2003 the administration of former president George W. Bush barred US citizens from doing business with the company, and the electrodes were seized by customs authorities in November.

But while the goods were still at sea the businessman had made a political donation of $2,000 to US Senator Dan Inouye of Hawaii, who intervened on his behalf.

A permit was issued in December as a "medical and humanitarian" exception.

A spokesman for the senator told the Times the contribution had "no impact whatsoever" on the senator's actions, which were motivated by public health concerns as medical waste was piling up at the facility.

The Times report found that other licenses were granted to firms operating in blacklisted countries such as Cuba and Sudan.

Jolly Time popcorn, sold through the American Pop Corn Company to both Sudan and Iran, was likewise counted as humanitarian aid.

The firm's export manager Henry Lapidos described the designation as "pushing the envelope."

But then he asked: "What's the harm?" adding that he didn't think Iranian soldiers "would be taking microwavable popcorn" to war.