UPDATE: U.S. Congress Warns Michelin on Iran - Tire Review Magazine

UPDATE: U.S. Congress Warns Michelin on Iran

The Daily Beast reported Feb. 26 that French companies like Michelin could risk Pentagon contracts if they take further steps towards doing business with Iran.
“International firms racing to do business with post-sanctions Iran could jeopardize their contracts with the U.S. military,” The Daily Beast reported. “Three Republican lawmakers who serve on the House Armed Services Committee warned French firms last week that dealings with Iran could make it impossible to do business with the Pentagon in the future.”
As Tire Review reported yesterday, Groupe Michelin expressed eagerness to resume exporting its car and truck tires to Iran once international sanctions are lifted. The company is keeping an eye on competitors that might try to get a head start.
Michelin was part of a delegation of more than 100 French company executives that visited Tehran in early February to see prospects for a resumption of normal commercial relations between Iran and the rest of the world. Jean-Dominique Senard, Michelin’s managing chairman, said the company is being respectful of the embargo rules, but wanted more visibility on what is happening.
Iran was Michelin’s biggest Middle East market until international sanctions over Iran’s nuclear ambitions were imposed. The company’s exports to Iran were phased out in 2011.
In a Feb. 18 letter to Defense Secretary Chuck Hagel, a group of lawmakers noted that since 2007 Michelin had earned more than $2.4 billion from U.S. military contract, and called Michelin’s participation in the Iran trip “greatly troubling.”
“‘We urge you to direct the Department to make clear to Michelin that any business with the Islamic Republic of Iran would make further contracts with the Department of Defense impossible,’ the lawmakers wrote to Hagel, according to The Daily Beast.
“They also asked the Pentagon to report back on how the U.S. government could terminate existing contracts with Michelin, if it wanted to, as well as what would be the costs of such terminations. A Congressional aide close to the issue said that if Michelin does enter into new business with Iran, lawmakers would try to use the annual defense appropriations and authorization bills to cut off the flow of U.S. taxpayer money to the French company.”
According to that same report, the Obama administration is well aware of the French business outreach to Tehran, and the president spoke directly to French President Francois Hollande last week, warning “that if French companies jump the gun and start doing business with Iran now, they face stiff penalties.”
Groupe Michelin managing chairman Jean-Dominique Senard was quoted by the Wall Street Journal in its Feb. 11 report that, “What I don’t want is that when trading with Iran eventually resumes, we discover that other companies have profited from a situation in which we have toed the line. That would be very upsetting.”

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