Chinese Companies Breaking through Iran Sanctions

stars and stripes of china and US

According to the Washington Post, a top US official has submitted a list of Chinese companies and banks that are breaking UN sanctions on Iran to the Chinese authorities.

It should be noted that the American officials’ face-saving caveat- that these Chinese companies are ignoring UN sanctions on their own and not with any blessing from Beijing- is likely true. While the Chinese government has lobbied hard against new rounds of sanctions, it has kept a fairly good record of abiding by whatever it has agreed to.

However, it should be noted that there have been notable enforcement lapses in the past with regards to Chinese companies operating in Iran. According to reports, Iran obtained 108 pressure gauges from one Chinese company in 2008. Just one year earlier, a small Chinese company sold graphite, tungsten copper, tungsten powder, and high-strength aluminum alloys to Iran. All of these materials are restricted due to their potential applications within an Iranian nuclear program.

US pressure on Chinese companies could reflect wider fears that China is positioning itself to dominate the Iranian energy market in the absence of any competitors. Big players like Japan’s INPEX, Lukoil, BP, and Royal Dutch Shell have all stopped doing business with Iran, with companies like INPEX walking away from very lucrative deals. Many observers in the West fear that China is positioning itself to fill the vacuum left by this exodus.

An unnamed US official speaking with the Washington Post had this to say on China’s export-control institutions:

“China has come a long way in putting in place an export-control system,” he said. “But it’s one thing to have a system that looks good on the books and it’s another thing to have a system that they enforce conscientiously… Where China’s system is deficient is on the enforcement side.”

The Global Times, the Chinese government’s outward-looking English newspaper, portrayed the US list as a scheme to pressure China over sanctions on Iran:

“China backed the fourth round of sanctions and it definitely will strictly abide by them… But Beijing’s daily trade and economic activities with Tehran’s other normal interests should not be affected.”

Back to Top


Lost your password?