Israel okays signing deals with companies working in Iran, gov’t reveals

In the letter, a top Finance Ministry official writes that companies working in Iran can still bid for the Jerusalem light rail project.

January 15, 2019 00:04
2 minute read.
Jerusalem light rail

Jerusalem light rail. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)


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Prime Minister Benjamin Netanyahu is often perceived as the primary statesman leading the battle against Iran and its pursuit of nuclear weapons. Over the years, Netanyahu’s efforts have included pushing Western countries to impose tough economic sanctions on Iran and to cut business ties with Iranian companies.

Apparently, though, this does not apply to doing business in Israel. According to a letter written by a high-level government official in the Finance Ministry and obtained by The Jerusalem Post, foreign companies that do business in Iran are not prevented from competing for major infrastructure projects in the State of Israel.

The letter was sent in recent days from the office of the accountant-general at the Finance Ministry and the chairman of the government’s Tender Committee to construction companies – Israeli and foreign – that are competing in a tender to construct a new light rail line in Jerusalem.

The letter was written in response to questions from some of the foreign companies competing in the tender, asking whether their involvement in projects in Iran would disqualify them from competing for the Jerusalem light rail contract. The companies are bidding for a deal to construct the Green Line for Jerusalem’s light rail as well as the extension of the existing Red Line. The deals are estimated to reach approximately $3.5 billion.

In August, as new US sanctions took effect on Iran, President Donald Trump said that companies doing business with Iran will be barred from the United States.

“These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!” Trump tweeted at the time.

In the letter though, the official writes that companies working in Iran can still bid for the Jerusalem light rail project. The Tender Committee, the official writes, was asked “to clarify whether the bidders may cooperate with entities which have business in Iran and are not listed in the list of the Israeli Sanctions Administration.”

In the letter, the accountant-general’s office refers bidders to previous documents which state the following: “In light of questions that have arisen in this regard, it is clarified that the current structures of the bidders themselves… do not give rise to any legal issues under the laws specified below.” It goes on to list the Trading with the Enemy Act and the Law on the Struggle against Iran’s Nuclear Program.

The government’s answer has direct impact on CRRC, a state-owned Chinese corporation that is competing for the contract to supply the locomotives for the Jerusalem light rail. Last May, for example, CRRC signed a massive multi-billion dollar contract to construct 450 subway wagons for Iran.

Allowing CRRC to compete in the tender though could contravene the Law on the Struggle against Iran’s Nuclear Program, which was passed in 2012 with the objective of imposing sanctions on individuals and corporations that assist Iran in promoting its nuclear program.

The law declares an additional objective that looks to impose restrictions “on corporations that maintain business relations with Iran, for Iran’s benefit or in its territory, as part of the international struggle against Iran’s nuclear program.”

The government’s answer clears the way for companies like CRRC to continue doing business in Iran while at the same time competing for massive infrastructure tenders in Israel.

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