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U.S. has warned France about doing business with Iran -Kerry

Source: Reuters - Wed, 5 Feb 2014 21:44 GMT
Author: Reuters
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* Kerry told Fabius trade delegation "not helpful," official says

* Iran criticises Sherman comments as unhelpful

* French employer group says Iran mission was "exploratory"

By Mehrdad Balali

DUBAI, Feb 5 (Reuters) - The United States has warned France that French companies - which sent executives to Tehran this week - will be punished if they violate U.S. sanctions with Iran, U.S. Secretary of State John Kerry said on Wednesday.

Separately, another U.S. official this week said Kerry had told French Foreign Minister Laurent Fabius that the visit was "not helpful" and that it gave the wrong impression that the West could do business with Tehran as usual.

Iran welcomed more than 100 executives from France's biggest firms on Monday, the most senior French trade mission in years.

That trip followed an interim agreement reached by Iran and six world powers in November under which Tehran agreed to limit parts of its nuclear work in return for the easing of some international sanctions.

The deal called for negotiation of a full agreement within a year. The easing of sanctions, which began in late January, has prompted Western firms to race for business opportunities even though the bulk of international sanctions remain in place.

"While the French may send some businesspeople over there, they're not able to contravene the sanctions. They will be sanctioned if they do and they know it. And we've put them on notice," Kerry told CNN's Jake Tapper in an interview.

On Tuesday, U.S. Under Secretary of State for Political Affairs Wendy Sherman told U.S. lawmakers in Washington that Kerry had spoken to Fabius "about the trade delegation ... about how this is not helpful."

"Tehran is not open for business because our sanctions relief is quite temporary, quite limited and quite targeted," she said.

Sherman and U.S. Treasury Under Secretary David Cohen also sought to address concerns in the Congress that too many concessions had been made to Iran in the nuclear talks.

While the initial agreement was "not perfect", it bought time to try to secure a comprehensive deal, U.S. officials said on Tuesday.

In Tehran, Iranian Foreign Minister Mohammad Javad Zarif criticised comments made by Sherman at the hearing in Congress, without specifying which ones he was reacting to.

"Such talk isn't helpful and could adversely impact the (nuclear negotiations). U.S. officials should stop such comments so that we can reach a solution," state media quoted Zarif as saying at a joint news conference on Wednesday with the head of the Organisation of Islamic Cooperation, Iyad Madani.

Zarif, however, acknowledged that "some comments made by Americans are for domestic consumption".

PRIVATE INITIATIVE

Asked about Kerry's conversation with Fabius, France's foreign ministry said the two men speak regularly and that the main French employers' association MEDEF had organised the trade delegation on its own initiative.

France, the euro zone's second largest economy, has for months vaunted an "economic diplomacy" drive to secure trade agreements abroad. However, MEDEF was behind the Iran trip.

"It was that organisation's initiative, in an exploratory capacity and in compliance with France's international engagements," the Foreign Ministry said in an online briefing.

French finance minister Pierre Moscovici said the visit should not be taken as a "sign of laxity, endorsement" but as "a bet on the future based both on firmess and negotiation".

The delegation on the Feb. 2-5 trip met Mohammad Nahavandian, President Hassan Rouhani's chief of staff, and members of Irans Chamber of Commerce, Industries, Mines and Agriculture, state news agency IRNA said.

Among the companies represented were Safran, Airbus , Total, GDF-Suez, Renault, Alcatel, Alstom and L'Oréal, a source close to the delegation said.

Pierre Gattaz, the head of MEDEF, said the delegation had not violated the terms of the interim nuclear accord.

"We faultlessly respected the Geneva Convention of last November, we're familiar with this framework. There are other European country delegations who were in Iran," he said.

UNEASE IN US CONGRESS

In December, a delegation of about 10 Austrian companies visited Tehran.

U.S. ambassador to Germany John Emerson told a business conference on Tuesday that Iran sanctions were working, "so the worst thing that could happen is that companies that would like to do business with Iran...jump to the front of the line before we are able to conclude...this agreement".

If Congress begins to see "a sieve or a hole in this process", Emerson warned, "they'll jump right in there and that could blow the negotiations up".

But a European diplomat pointed out that while the U.S. seemed to be discouraging foreign companies from warming ties with Iran, an American-Iranian business council was prepping U.S. companies on how to do business with the Islamic Republic by hosting a conference in Washington in April.

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