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GE stops new business orders in Iran

STAMFORD, Conn. - General Electric Co., which has been accused of collecting "blood money" by doing business in Iran, will stop accepting new orders for business in the country, company officials said Wednesday.

The move by the world's largest company by market value comes just days after another conglomerate, Halliburton Co., announced the company will wind down its operations in Iran.

"We're seeing a turnaround by a number of U.S. companies operating in Iran," said Dan Katz, chief counsel to Sen. Frank Lautenberg, D-N.J.

Katz said the moves may signal an imminent change in U.S. policy that has allowed foreign subsidiaries of American companies to do business in Iran.

Last year, Lautenberg accused GE and other American companies of collecting "blood money" by doing business with countries the United States says sponsors terrorism and said he would push for legislation to stop it. New York City comptroller William Thompson, as manager of employee pension funds, has pressured GE and other companies.

U.S. firms are not allowed to do business with nations deemed by the United States to sponsor terrorism. But the law does not specifically bar foreign subsidiaries from such business.

"Our business activities in Iran are fully compliant with U.S. law," said Gary Sheffer, a GE spokesman.

Lautenberg said the companies should not have been operating in Iran. "When American companies do business with Iran, they are helping the Iranians create revenue that is funneled to terrorists," Lautenberg said.

GE said it decided on the moratorium in December. The decision, which became effective Tuesday, comes amid tensions and threats of sanctions over Iran's nuclear program.

"Because of uncertain conditions related to Iran, including concerns about meeting future customer commitments, we will not accept any new orders for business in Iran effective Feb. 1," Sheffer said. "This moratorium on new orders will be re-evaluated as conditions relating to Iran change."

GE did about $270-million in business last year in Iran, representing less than 1 percent of its revenue, Sheffer said. Through a foreign subsidiary, GE has provided hydroelectric equipment, medical equipment and oil and gas equipment in Iran.

None of the business involves the sale of nuclear products, Sheffer said. He said it would take about a year for GE to complete its existing contracts.

Lautenberg has said he would offer a measure that would bar any firm controlled more than 50 percent by an American parent from doing business with terror states. Lautenberg and Thompson singled out three companies - Halliburton Co., ConocoPhillips, and GE - for exploiting what they said was a loophole in the law.

The government has identified Iran, Syria, Libya, Cuba, Sudan and North Korea as sponsors of terrorism. Libya is working to have its sanctions dropped.

ConocoPhillips, the nation's third-largest oil company, has promised to pull out of Syria.

[Last modified February 3, 2005, 01:07:17]