Swiss slammed for forgoing EU sanctions on Iran

Critics slam Bern government after Geneva-based oil company Vitol sells millions of barrels of Iranian oil.

By JERUSALEM POST CORRESPONDENT
October 4, 2012 23:44
4 minute read.
Iranian crude oil supertanker

Iranian crude oil supertanker 370. (photo credit: REUTERS/Tim Chong)

 
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The Swiss government’s refusal to adopt comprehensive EU sanctions targeting Iran’s energy and finance systems – and the disclosure in late September that the Swiss-based company Vitol bought and sold millions of barrels of Iranian oil — has prompted concern from the US Embassy in Bern and sharp criticism from Israeli, US and Swiss experts.

“It is truly shameful that the Swiss government continues to help Iran evade EU sanctions as the regime in Tehran continues its march toward nuclear weapons, denies the Holocaust, threatens its neighbors and oppresses its people,” Josh Block, a former Clinton administration official who was recently named CEO of The Israel Project, an American pro-Israel organization based in Washington, wrote The Jerusalem Post by email on Thursday.

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The Geneva-based Vitol — the world’s largest oil trader — skirted sanctions and “bought 2 million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders,” Reuters reported late last month.

Alexander Daniels, a spokesman for the US Embassy in Bern, wrote the Post on Thursday, “We are aware of reports that Vitol may have traded Iranian fuel oil and welcome Vitol’s commitment to cease transactions with Iran. Sanctions are placing significant financial pressure on Iran. We have heard reports that oil-trading company Vitol may have been involved in a fuel oil deal with Iran.”

Daniels added that “Vitol has acknowledged one transaction in July 2012 and issued a statement on September 26, saying that the company will ‘no longer purchase any product of Iranian origin.’ While we continue to look into all possible sanctionable activities, we welcome Vitol’s commitment to cease transactions with Iran, a commitment that is in line with that made by many other companies and governments throughout the world.”

Jonathan Kreutner, general secretary of Switzerland’s 18,000-member Jewish community, wrote to the Post on Thursday; “In contrast to the EU, the Swiss have not prohibited oil trade and its financing” with Iran, rather the Swiss government has only made registering such trade obligatory.

“We expect from the Swiss government that the Swiss will completely adopt the enhanced EU sanction measures, and freeze the assets of the Iranian central bank located in Swiss banks as the EU decided,” Kreutner said.

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He continued, “We are of the opinion that only sharp sanctions against Iran can prevent an escalation in the Middle East.

Moreover, we are concerned that foreign subsidiaries of Swiss firms could undermine sanction measures. We, therefore, call on the Swiss Bundesrat [Federal Council, the seven-member collective head of state] to extend the existing Swiss sanction measures toward Iran to foreign subsidiaries of Swiss firms.”

As a non-member of the European Union, Switzerland is not required to follow EU sanctions.

Marie Avet, a spokeswoman for the Swiss Economic Ministry, told the Post, however, that Switzerland has implemented a large part of the EU penalties against Iran from the January and March, 2012, EU sanction rounds.

Avet wrote that Vitol confirmed to the ministry that its “Geneva office was not involved in the business, rather it was a subsidiary in Bahrain.”

She said that Swiss sanctions are not applicable to subsidiary companies of Swiss enterprises.

Asked about the October 15 EU sanctions against Iran, Avet said that “Switzerland will decide in due time whether the new sanctions will be adopted.”

The spokeswoman said Switzerland decided not to sanction Iran’s Central Bank because of its importance for the Iranian economy. The Obama administration sanctioned the Central Bank in February because of its “deceptive practices” within the context of Iran using banks to finance its nuclear weapons program.

Tommy Steiner, a senior research fellow at the Institute for Policy and Strategy at the Interdisciplinary Center Herzliya, told the Post on Thursday, “The incident involving the Vitol Group reveals that there are still not insignificant loopholes in the international sanctions regime that the international community must urgently address also through applying pressure on the Swiss government. But not less importantly, the story also reveals the effectiveness of the sanctions regime by demonstrating how difficult it is for Iran to market its oil on the international markets. I find it striking what maneuvering the Iranians were compelled to undertake to unload 2 million barrels of oil.”

In response to a series of questions about the nature and volume of Vitol’s trade with Iran and whether the company endangered international security, a Geneva-based Vitol spokesman wrote the Post, “The Vitol Group does not purchase any product of Iranian origin and is in compliance with all applicable law and regulations governing trade with Iran. No further comment.”

Block said the overall Swiss position toward sanctions shows they are continuing their behavior during World War II. “Just like they continued to trade with Nazi Germany as that heinous regime slaughtered Jews and terrorized the people of Europe, by aiding Iran today the Swiss government embarrasses its people and itself,” he said.

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