Fiat Ban On Sales To Iran Seen As Victory In Sanctions Campaign
05/25/2012| 04:58pm US/Eastern
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By Bob Tita
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Supporters of trade sanctions against Iran said Friday that Italian auto maker Fiat SpA's (>> Fiat SpA) decision to stop doing business in Iran represented a major victory in a campaign to align European companies against Iran's nuclear program and human-rights violations.
Fiat and its sister companies, Fiat Industrial and CNH Global N.V. (CNH), said they will cease business activities in Iran in support of diplomatic efforts to convince the leaders of Iran to abandon its nuclear program, which is widely suspected of developing nuclear weapons. Iran has denied that it is making nuclear weapons.
"Fiat announces that effective immediately its subsidiaries will no longer carry out business activity related to products or components where the ultimate destination of such products is known to be Iran, other than to the limited extent required to fulfill already existing binding obligations," said Fiat, which also owns U.S. auto maker Chrysler Group LLC.
Fiat Industrial and CNH issued statements with the same wording. Fiat exports cars to Iran while Fiat Industrial exports buses and trucks under its Iveco brand. CNH Global builds farm and construction machinery that is sold in Iran.
United Against Nuclear Iran, a New York-based lobbying group, said Fiat's decision is a milestone in its campaign to convince multinational corporations to stop selling products in Iran.
"We welcome this announcement and are pleased that Fiat's subsidiary Iveco will no longer sell trucks to the Iranian regime, which has used them to transport ballistic missiles and perform gruesome public executions," the group said in a written statement.
United Against Nuclear Iran also has been waging a "Cranes Campaign" against companies whose machinery in Iran is used in executions where the condemned are hung from cranes and their bodies left to dangle for public display. The group has used public-pressure tactics against several U.S. companies in recent years that it viewed as skirting a U.S. prohibition against domestic companies selling directly to Iranian customers.
Caterpillar Inc. (>> Caterpillar Inc.), Ingersoll-Rand PLC (>> Ingersoll-Rand PLC), General Electric Co. (>> General Electric Company), Terex Corp. (TEX) and Huntsman Corp. (>> Huntsman Corporation) are among the U.S. companies that have moved to cut off overseas subsidiaries and independent dealers with sales ties to Iranian customers.
The group said European and Asian companies have started to follow suit after largely resisting pressure from the group in the past.
"Things are really changing and a lot of it has to do with the European Union getting more serious" about Iran's nuclear program, said Nathan Carleton, a spokesman for United Against Nuclear Iran. "It's a different climate than it was a year ago."
Carleton said Fiat joins rival auto makers Porsche Automobil Holding SE (PAH3.XE) in Germany and South Korea's Hyundai Motor Co. (005380.SE) in recently disclosing that they will cease sales to Iran.
Carleton said the group intends to remain vigilant about monitoring Fiat's business activities in Iran, noting that other companies have used existing contracts with dealers and distributors to maintain a presence in Iran long after announcing an end to direct sales activities.
"We're going to keep an eye on it," he said.
The U.S. has said Iran must take significant steps toward addressing concerns that it wants to build nuclear weapons before economic sanctions are lifted. The latest talks to reach an agreement were held in Iraq this week.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
--Gilles Castonguay contributed to this article.
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