Iranian Commercial Activities: Update on Foreign Firms Reported to Have Engaged in Iran's Energy or Communications Sectors

GAO’s reviews of open sources published between December 2, 2014, and December 1, 2015, identified six foreign firms that were reported to have engaged in commercial activity in Iran’s energy sector during this time period. For five additional firms that GAO had previously identified as reported to have engaged in commercial activity in Iran’s energy sector, GAO found insufficient information to indicate whether they had continued or ceased such activity during the current specified time period.

GAO’s review of open sources published between December 2, 2014, and December 1, 2015, did not identify any foreign firms that were reported to have exported technologies to the Iranian government for blocking telecommunications by monitoring, filtering, or disrupting the flow of information and communications. In a prior report, GAO noted numerous challenges to identifying such firms through open sources. For example, technology that can enable acceptable filtering to block objectionable sites can also be used for unacceptable filtering to disrupt the free flow of information and communication.

None of the six firms that GAO identified as reported to have engaged in commercial activity in Iran’s energy sector at some point between December 2, 2014, and December 1, 2015, had U.S. government contracts, according to the Federal Procurement Data System-Next Generation (FPDS-NG), the primary government-wide contracting database since 1978. As already noted, GAO did not identify any firms that were reported to have exported technologies for telecommunications blocking during this period.

Senate committee reports 111-201 and 112-26 contain recurring mandates for GAO to report on firms engaging in certain types of commercial activities involving Iran’s energy and communications sectors. Iran’s economy relies on oil and gas exports, and, according to the Department of State (State), Iran has blocked its citizens’ access to telecommunications. In response to these mandates, GAO has issued a series of reports on foreign firms reported to have engaged in commercial activities in Iran’s energy sector or to have exported technologies to Iran for blocking telecommunications.

This report updates GAO’s prior reports by identifying (1) foreign firms reported to have engaged in commercial activity in Iran's energy sector between December 2, 2014, and December 1, 2015; (2) foreign firms reported to have exported technology to Iran between December 2, 2014, and December 1, 2015, for telecommunications blocking; and (3) any of these identified firms that had U.S. government contracts, awards, or purchasing agreements while having been reported to have engaged in such activities. In addition, enclosure II updates the activity status for firms that GAO previously identified as having been reported to be engaged in such activities.

To accomplish the first two objectives, GAO used information published in open sources between December 2, 2014, and December 1, 2015, updating information included in prior GAO reports. These open sources consisted of industry and trade publications, corporate reports and statements, and U.S. Securities and Exchange Commission filings. On the basis of the open-source information, GAO categorized firms as “active,” “insufficient information available,” or “withdrawn.” GAO attempted to contact all of the firms categorized as active or insufficient information available to offer them an opportunity to comment on the findings. GAO did not review the contracts and documents underlying any reported transactions and did not independently verify such transactions. The Secretary of State is responsible for determining whether such activities meet the legal criteria for sanctionable activities under U.S. law; GAO did not attempt to make such determinations. For the third objective, GAO searched FPDS-NG. GAO provided a draft of this report to State for comment. State declined to provide formal or technical comments.

For more information, contact Tom Melito at 202-512-9601 or melitot@gao.gov.