Iran Uprising
Thursday May 25, 2017

Sanctions Force Siemens Out of Iran’s South Pars Contract

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Siemens pledged to leave Iran back in 2010, under international pressure sectioning this country for its clandestine nuclear program, and also after being criticized for providing surveillance and filtering technology to the Iranian regime that resulted in many arrests during 2009-2010 after-elections uprising in that country. 

But a big jump in business and revenue during 2010 and 2011 never allowed the giant to leave.  In 2010, Siemens made over $967 million more than the previous year in Iran reported The Wall Street Journal on April 5, 2011.

But Siemens insists that it has only been carrying on with old contracts and is not accepting any new business from that country. "Otherwise we could be accused of breaching contracts and face compensatory damages," Siemens CEO Peter Löscher explained at the company's shareholder meeting in January, last year.

Over the years Siemens has won major contracts in Iran.  That includes a $420 million contract to provide Iran with 150 locomotives and also the gas turbine and compressor contract for the South Pars gas projects.

Furthermore, Siemens, along with its mobile communication network partner Nokia, announced plans to reduce its commitments in Iran since January 1, 2012. In a letter to its Iranian employees, a copy of which is obtained by The Wall Street Journal, the company wrote earlier this year that toughening global sanctions against Iran "make it almost impossible for Nokia Siemens Networks to do business with Iranian customers."

In the letter Nokia-Siemens stated that it will continue to support its existing customers and honor contracts for as long as possible within boundaries of any international law and sanctions.  But the company has had increasing problems in receiving money from Iran since latest international sanctions on Iranian financial sector.

In the mean time, Iranian officials accuse Siemens of providing sensitive information to U.S. and Israelis about control systems it has acquired from that company, enabling them to damage Iran’s industry.  Iran says the US and Israelis have used the details provided by Siemens to produce the Stuxnet worm that specifically attacks Iranian centrifuges used for enriching uranium.  Iran originally played down the effects of the Stuxnet worm in July 2010 but later admitted that its nuclear program had received a major blow as a result of the cyber attack by the virus.

Siemens denied Iranian allegations that it had participated in the production of Stuxnet virus.

The German Chancellor Angela Merkel has enacted a policy in to reduce business with Iran since 2010.