Siemens and Iran: A checkered past
After decades of cooperation, why is the Islamic Republic so quick these days to point the finger at the German giant?
The accusations Saturday in Tehran, alleging components manufactured by the German engineering and electronics giant, Siemens, contained explosives that were designed to sabotage Iran's nuclear installations, put the Munich-based corporation in a double-bind.
On the one hand it can't allow anything to damage the reputation of its precision equipment and perfect delivery standards, but on the other it certainly doesn't want anyone to think it is helping Iran achieve a nuclear weapon. Siemens' denial today was short and to the point:
"Siemens does not have any business ties with Iran's nuclear program and does not supply any technical equipment for it."
But there is a hidden question in this corporate statement. If Siemens does not have any business ties with the Iranian nuclear program, shouldn't it be clear that they do not supply it with any technical equipment?
It isn't that clear, however. This is because Siemens has form when it comes to Iran's nuclear program, not just because the nuclear reactor was originally designed and supplied by the Germany company, under a deal signed before the 1979 Islamic revolution.
Following the revolution, Siemens was to have cut off its ties with the project, but despite the completion of the reactor - which became the responsibility of Russian company Atomstroyexport - Siemens parts continued to find their way to Bushehr, sold to the Russians and appearing in Iran (to the Germans' apparent astonishment.) A Der Spiegel investigation two years ago detailed how Siemens parts were shipped through second and third parties.
It wasn't only reactor parts. The critical software in Iran's uranium enrichment centrifuges that was targeted in 2010 by the Stuxnet computer virus also carried the Siemens logo. The company scurried to ensure its customers that the supervisory control and data acquisition (SCADA) industrial control system could quickly be fixed, but was less forthcoming on the way the software became so central to the enrichment process.
Siemens has been key to the Iranian regime not just in pursuing its nuclear ambitions. It has also been key in huge infrastructure deals, and its subsidiary Nokia-Siemens Networks has been accused by Iranian human rights activists of supplying the Islamic Republic with the apparatus to spy on opposition members' phone calls and social networking during the Green Revolution. The company tried to deflect these accusations but by the end of 2011, Nokia-Siemens admitted that international sanctions were making"it almost impossible for Nokia Siemens Networks to do business with Iranian customers."
The importance of Iranian business to Siemens can be gauged by the corporation's latest quarterly report to investors, which says that:
"…in the beginning of calendar year 2012, Siemens resolved to amend the policies to provide that no new business with respect to products and services destined to maintain the installed base in Iran’s oil & gas sector may be entered into under any circumstances. In addition, even outside the oil & gas sector, products and services for the installed base in Iran may be provided only in strictly limited circumstances which can be demonstrated to satisfy humanitarian purposes or private purposes serving the common good (e.g. water supply and healthcare of the civilian population)."
Siemens warns its investors that the curtailment of business in Iran could cause financial damage.
"Under certain limited circumstances, however, we continue to conduct certain business activities and provide products and services to customers in Iran. We believe that such activities to date have not had a material adverse impact on our reputation and share value. Going forward, divestment or similar initiatives adopted or proposed in various jurisdictions with respect to Iran, as well as new or tightened export control regulations, sanctions, embargos or other forms of trade restrictions imposed on Iran may result in a further curtailment of our existing business in Iran or in a further adaptation of our policies. In addition, the termination of our activities in Iran may expose us to customer claims and other actions."
Germany continues to be one of Iran's main trading partners, exporting goods worth 3.8 billion euros in 2010. The Israeli government, despite calling upon the international community to cut commercial ties with Iran, has so far been largely quiet on the Germany-Iran connection. Perhaps to a certain extent this is due to the fact that Germany is continuing to partly finance Israel's acquisition of German-built Dolphin submarines.
Iran has been very busy in recent days accusing the west of waging a clandestine war against its nuclear program. There has been a report of explosions taking out the power-lines leading to the Fordow underground uranium enrichment facility; another explosion when security tried to remove an eavesdropping device disguised as a rock planted somehow inside Fordow; accusations that the International Atomic Energy Agency (IAEA) has been passing information on Iran to Israel – which were probably made to justify earlier quotes by a senior Iranian official that his country had been intentionally misleading the IAEA; and now the Siemens allegations.
Whatever the accuracy of any of these reports and allegations, there can be little doubt that the secret war against Iran is being waged intensively and with a great degree of creativity. The Iranian decision to add Siemens, a company which has cooperated in the past with the regime to its long list of culprits, is interesting. It could mean that the Germans have finally indeed broken off their ties – or perhaps the Iranians are frantically trying to throw their enemies off the scent.