Firms Reported in Open Sources to Have Sold Iran Refined Petroleum Products between January 1, 2009, and June 30, 2010
Gao ID: GAO-10-967R September 3, 2010The United States has imposed multiple sanctions against Iran to deter it from developing its nuclear program, supporting terrorism, and abusing human rights. On July 1, 2010, the President signed into law the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010. CISADA amends the Iran Sanctions Act of 1996 (ISA) to require the President to impose three or more of a possible nine sanctions against persons who knowingly sell or provide Iran with refined petroleum products that, during a 12-month period, (1) have a fair market value of $1 million or more or (2) have an aggregate fair market value of $5 million or more. These new provisions regarding the sale or provision of refined petroleum products to Iran apply only to the sale or provision of refined petroleum products made on or after July 1, 2010. Under ISA, one of the sanctions that the President can apply is to bar foreign firms State administers ISA sanctions. According to the Department of Energy (DOE), Iran currently does not have sufficient refining capacity to meet its domestic demand for gasoline. Iran imported approximately 130,000 barrels of gasoline per day in 2009 as well as other refined products, such as diesel fuel. Iran's nine refineries are operated by the National Iranian Oil Refining and Distribution Company, according to DOE. With the potential participation of foreign companies, Iran plans to add capacity at eight of its nine refineries in an attempt to fully meet domestic demand for gasoline by 2013 or 2014 at currently projected demand levels, according to DOE officials. This report highlights open source information that, following further investigation by the State Department, could contribute to the identification of persons or firms whose activities may be sanctionable under ISA, as amended by CISADA. As Congress requested, in this report, we identify (1) firms that were reported to have sold refined petroleum products to Iran at any time during the period between January 1, 2009, and June 30, 2010, and (2) firms that also had U.S. government contracts in fiscal year 2009 or 2010 (up to June 2010). We define the sale of refined petroleum products as receiving payment for the provision of any such products through direct sale, shipment, or brokering (i.e., trading) of these products to Iran. GAO did not review the contracts or documents underlying these transactions reported in open sources and did not independently verify these transactions. Further, we did not attempt to determine whether the firms listed in this report meet the legal criteria specified in ISA, as amended by CISADA, and we did not attempt to determine whether reported transactions were conducted on or after July 1, 2010--the date of enactment of CISADA. The Secretary of State is responsible for making such determinations.
In this report, 16 firms were identified in open sources as having sold refined petroleum products to Iran at any time during the period between January 1, 2009, and June 30, 2010. GAO did not attempt to determine whether the firms meet the legal criteria specified in ISA as amended by CISADA, or whether sales were conducted on or after July 1, 2010--the date of enactment of CISADA. According to DOE, firms that sell refined petroleum products to Iran may change over the course of a year because a firm may increase, decrease, or end sales from one month to the next. According to the State Department, some firms may have discontinued their activities after passage of CISADA to avoid triggering sanctions. We sorted the 16 firms into different tables on the basis of open source information and the firms' responses to our inquiries. We provided all firms with an opportunity to comment on the information we found in open sources by calling the firms and sending each firm an e-mail. Further, 5 firms reported at least three open sources as having sold Iran refined petroleum products at any time during the period between January 1, 2009, and June 30, 2010. We found no reports or official statements to indicate that these firms have stopped their sales. None of the 5 firms had provided us with comments as of August 27, 2010. Four of the firms are based in Asia, and 1 is based in the Middle East. Three open sources are listed as having sold Iran refined petroleum products at any time during the period between January 1, 2009, and June 30, 2010, but the 3 firms are also reported in at least three open sources as having stopped their sales during this same time period. One of the firms is based in Europe and Asia, 1 is based in the Middle East, and 1 is based in Asia. Of these 3 firms, the Independent Petroleum Group of Kuwait confirmed that it had sold refined petroleum products to Iran during the period between January 1, 2009, and June 30, 2010. The other 2 firms--Lukoil and Petronas--had not provided us with comments as of August 27, 2010. At least three open sources reported had sold Iran refined petroleum products at any time during the period between January 1, 2009, and June 30, 2010, but notified GAO that they had stopped their sales. Five of the firms are based in Europe, 1 is based in Eurasia, and 1 is based in Asia. Open sources also reported that all of these firms have stopped selling refined petroleum products to Iran. At least three open sources reported had sold Iran refined petroleum products at any time during the period between January 1, 2009, and June 30, 2010, but notified GAO that it did not sell Iran refined petroleum products during this time period. British Petroleum of the United Kingdom notified GAO that the information reported in open sources was inaccurate. In fiscal years 2009 and 2010, the U.S. government obligated over $2.3 billion in contracts to 3 of the 16 firms. The Department of Defense (DOD) obligated over 99 percent of these funds for purchases of fuel and petroleum products overseas. These 3 firms are presented in table 5 in order of magnitude of obligations, from greatest to least, as reported by the primary government contracting database. According to the primary governmentwide contracting database, DOD obligated funds to (1) British Petroleum for the purchase of jet and turbine fuel; (2) Total of France for the purchase of jet fuel, gasoline, and diesel; and (3) Emirates National Oil Company for the lease of fuel storage buildings.
GAO-10-967R, Firms Reported in Open Sources to Have Sold Iran Refined Petroleum Products Between January 1, 2009, and June 30, 2010
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GAO-10-967R:
United States Government Accountability Office:
Washington, DC 20548:
September 3, 2010:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Jon Kyl:
Ranking Member:
Subcommittee on Terrorism and Homeland Security:
Committee on the Judiciary:
United States Senate:
Subject: Firms Reported in Open Sources to Have Sold Iran Refined
Petroleum Products between January 1, 2009, and June 30, 2010:
The United States has imposed multiple sanctions against Iran to deter
it from developing its nuclear program, supporting terrorism, and
abusing human rights. On July 1, 2010, the President signed into law
the Comprehensive Iran Sanctions, Accountability, and Divestment Act
(CISADA) of 2010.[Footnote 1] CISADA amends the Iran Sanctions Act of
1996 (ISA) to require the President to impose three or more of a
possible nine sanctions against persons who knowingly sell or provide
Iran with refined petroleum products that, during a 12-month period,
(1) have a fair market value of $1 million or more or (2) have an
aggregate fair market value of $5 million or more.[Footnote 2] These
new provisions regarding the sale or provision of refined petroleum
products to Iran apply only to the sale or provision of refined
petroleum products made on or after July 1, 2010. Under ISA, one of
the sanctions that the President can apply is to bar foreign firms
that engage in these activities from U.S. government procurement.
[Footnote 3] The Department of State administers ISA sanctions.
According to the Department of Energy (DOE), Iran currently does not
have sufficient refining capacity to meet its domestic demand for
gasoline. Iran imported approximately 130,000 barrels of gasoline per
day in 2009 as well as other refined products, such as diesel fuel.
Iran's nine refineries are operated by the National Iranian Oil
Refining and Distribution Company, according to DOE. With the
potential participation of foreign companies, Iran plans to add
capacity at eight of its nine refineries in an attempt to fully meet
domestic demand for gasoline by 2013 or 2014 at currently projected
demand levels, according to DOE officials.
This report highlights open source information that, following further
investigation by the State Department, could contribute to the
identification of persons or firms whose activities may be
sanctionable under ISA, as amended by CISADA. As you requested, in
this report, we identify (1) firms that were reported to have sold
refined petroleum products[Footnote 4] to Iran at any time during the
period between January 1, 2009, and June 30, 2010, and (2) firms that
also had U.S. government contracts in fiscal year 2009 or 2010 (up to
June 2010). We define the sale of refined petroleum products as
receiving payment for the provision of any such products through
direct sale, shipment, or brokering (i.e., trading) of these products
to Iran. GAO did not review the contracts or documents underlying
these transactions reported in open sources and did not independently
verify these transactions. Further, we did not attempt to determine
whether the firms listed in this report meet the legal criteria
specified in ISA, as amended by CISADA, and we did not attempt to
determine whether reported transactions were conducted on or after
July 1, 2010--the date of enactment of CISADA. The Secretary of State
is responsible for making such determinations.
To accomplish our objectives, we reviewed open sources, including
energy industry standard publications and corporate statements.
Examples of industry standard publications include Oil Daily, Oil &
Gas News, and Platt's Oilgram News. We listed a firm as having sold
refined petroleum products to Iran if three reputable industry
publications or the firm's corporate statements reported that the firm
sold these products to Iran at any time between January 1, 2009, and
June 30, 2010. We also indicated whether open sources reported that a
firm stopped selling refined petroleum products during this period. We
provided firms with an opportunity to comment by telephone and e-mail
on the information reported in open sources. Not all of our attempts
to reach the firms were successful. To determine whether firms also
had U.S. government contracts, we searched the primary governmentwide
contracting database for references to the firms. We also obtained
U.S. government documents to corroborate information found in the
contracting database. See enclosure I for a full description of our
scope and methodology.
We conducted our work from April 2010 to August 2010 in accordance
with all sections of GAO's Quality Assurance Framework that are
relevant to our objective. The framework requires that we plan and
perform the engagement to obtain sufficient and appropriate evidence
to meet our stated objective and discuss any limitations in our work.
We believe that the information and data obtained, and the analysis
conducted, provide a reasonable basis for any findings and conclusions.
Sixteen Firms Are Reported to Have Sold Refined Petroleum Products to
Iran between January 1, 2009, and June 30, 2010:
The following four tables list 16 firms identified in open sources as
having sold refined petroleum products to Iran at any time during the
period between January 1, 2009, and June 30, 2010. GAO did not attempt
to determine whether the firms meet the legal criteria specified in
ISA as amended by CISADA., or whether sales were conducted on or after
July 1, 2010--the date of enactment of CISADA. According to DOE, firms
that sell refined petroleum products to Iran may change over the
course of a year because a firm may increase, decrease, or end sales
from one month to the next. According to the State Department, some
firms may have discontinued their activities after passage of CISADA
to avoid triggering sanctions. We sorted the 16 firms into different
tables on the basis of open source information and the firms'
responses to our inquiries. We provided all firms with an opportunity
to comment on the information we found in open sources by calling the
firms and sending each firm an e-mail.
Table 1 lists 5 firms reported in at least three open sources as
having sold Iran refined petroleum products at any time during the
period between January 1, 2009 and June 30, 2010. We found no reports
or official statements to indicate that these firms have stopped their
sales. None of the 5 firms had provided us with comments as of August
27, 2010. Four of the firms are based in Asia, and 1 is based in the
Middle East.
Table 1: Firms Reported in Open Sources to Have Sold Iran Refined
Petroleum Products between January 1, 2009, and June 30, 2010, with No
Indication that They Have Stopped Sales:
Firm/Country[A]: Emirates National Oil Company/United Arab Emirates;
Summary of open sources: Open sources reported that Emirates National
Oil Company sold gasoline to Iran in 2010;
Comments from firm: Attempted to contact on June 29, 2010.[B] No
comment as of August 27, 2010.
Firm/Country[A]: Hin Leong Trading/Singapore;
Summary of open sources: Open sources reported that Hin Leong Trading
sold refined petroleum products, including diesel and gas oil, to Iran
in 2009;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
Firm/Country[A]: ChinaOil[C]/China;
Summary of open sources: Open sources reported that ChinaOil sold
gasoline to Iran in 2010;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
Firm/Country[A]: Unipec[D]/China;
Summary of open sources: Open sources reported that Unipec sold
gasoline to Iran in 2010;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
Firm/Country[A]: Zhuhai Zhenrong/China;
Summary of open sources: Open sources reported that Zhuhai Zhenrong
sold gasoline to Iran in 2010;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
Source: GAO review of open sources.
[A] The country listed in this column is the physical location of the
firm as reported in open sources.
[B] Our attempts to contact Emirates National Oil Company were
unsuccessful.
[C] Open sources identified ChinaOil as the trading subsidiary of
PetroChina.
[D] Open sources identified Unipec as the trading subsidiary of China
Petroleum & Chemical Corporation (Sinopec).
[End of table]
Table 2 lists 3 firms reported in at least three open sources as
having sold Iran refined petroleum products at any time during the
period between January 1, 2009, and June 30, 2010, but the 3 firms are
also reported in at least three open sources as having stopped their
sales during this same time period. One of the firms is based in
Europe and Asia, 1 is based in the Middle East, and 1 is based in
Asia. Of these 3 firms, the Independent Petroleum Group of Kuwait
confirmed that it had sold refined petroleum products to Iran during
the period between January 1, 2009, and June 30, 2010. The other 2
firms--Lukoil and Petronas--had not provided us with comments as of
August 27, 2010.
Table 2: Firms Reported in Open Sources to Have Sold Iran Refined
Petroleum Products between January 1, 2009, and June 30, 2010, but
Some Indication They Have Stopped Sales:
Firm/Country[A]: Independent Petroleum Group (IPG)/Kuwait;
Summary of open sources: Open sources reported that IPG sold gasoline
to Iran in 2009 and 2010 and stopped in 2010;
Comments from firm: IPG confirmed that it sold gasoline to Iran in
2009 and 2010.
Firm/Country[A]: Lukoil (Litasco)/Russia (Switzerland);
Summary of open sources: Open sources reported that Litasco (Lukoil's
trading subsidiary) sold gasoline to Iran in 2009 and 2010. Open
sources reported that Lukoil stopped selling gasoline to Iran in 2010;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
Firm/Country[A]: Petronas[B]/Malaysia;
Summary of open sources: Open sources reported that Petronas sold
gasoline to Iran in 2009 and 2010 and stopped in 2010;
Comments from firm: Contacted on June 29, 2010. No comment as of
August 27, 2010.
[End of table]
[A] The country listed in this column is the physical location of the
firm as reported in open sources.
[B] Open sources identified both Petronas and its trading subsidiary,
Petco, as having sold gasoline to Iran in 2010.
Source: GAO review of open sources.
Table 3 lists 7 firms that (1) at least three open sources reported
had sold Iran refined petroleum products at any time during the period
between January 1, 2009, and June 30, 2010, but (2) notified GAO that
they had stopped their sales. Five of the firms are based in Europe, 1
is based in Eurasia, and 1 is based in Asia. Open sources also
reported that all of these firms have stopped selling refined
petroleum products to Iran.
Table 3: Firms Reported in Open Sources to Have Sold Iran Refined
Petroleum Products between January 1, 2009 and June 30, 2010, but
Notified GAO That They Have Stopped Sales:
Firm/Country[A]: Glencore/Switzerland;
Open sources reported that Summary of open sources: Glencore sold
gasoline to Iran in 2009, but subsequently stopped in 2009;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in September 2009.
Firm/Country[A]: Reliance Industries/India;
Open sources reported that Summary of open sources: Reliance
Industries of India sold gasoline to Iran in 2009, but subsequently
stopped in 2009;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in May 2009, and that its gasoline export contracts prohibit
buyers from selling its gasoline to Iran.
Firm/Country[A]: Royal Dutch Shell/The Netherlands;
Summary of open sources: Open sources reported that Royal Dutch Shell
sold gasoline to Iran in 2009, but subsequently stopped in 2009;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in October 2009.
Firm/Country[A]: Total/France;
Summary of open sources: Open sources reported that Total sold
gasoline to Iran in 2009 and 2010, but subsequently stopped in 2010;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in May 2010.
Firm/Country[A]: Trafigura/Switzerland;
Summary of open sources: Open sources reported that Trafigura sold
gasoline to Iran in 2009 and 2010, but subsequently stopped in 2010;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in November 2009.
Firm/Country[A]: Tupras/Turkey;
Summary of open sources: Open sources reported that Tupras sold
gasoline to Iran in 2010;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in July 2010, following the announcement of U.S. sanctions
against Iran on July 1, 2010.
Firm/Country[A]: Vitol/Switzerland;
Summary of open sources: Open sources reported that Vitol sold
gasoline to Iran in 2009 and 2010, but subsequently stopped in 2010;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in early 2010.
Source: GAO review of open sources.
[A] The country listed in this column is the physical location of the
firm as reported in open sources.
[End of table]
Table 4 lists 1 firm that (1) at least three open sources reported had
sold Iran refined petroleum products at any time during the period
between January 1, 2009 and June 30, 2010, but (2) notified GAO that
it did not sell Iran refined petroleum products during this time
period. British Petroleum of the United Kingdom notified GAO that the
information reported in open sources was inaccurate.
Table 4: Firm Reported in Open Sources to Have Sold Iran Refined
Petroleum Products between January 1, 2009, and June 30, 2010, but
Notified GAO That It Had Not Done So:
Firm/Country[A]: British Petroleum (BP)/United Kingdom;
Summary of open sources: While some open sources reported that BP sold
gasoline to Iran in 2009 or 2010, other open sources reported that BP
stopped selling gasoline to Iran in 2008;
Comments from firm: Notified GAO that it stopped selling gasoline to
Iran in October 2008. BP claimed that the information in the open
sources that reported BP sold gasoline to Iran in 2009 or 2010 was
inaccurate.
[A] The country listed in this column is the physical location of the
firm as reported in open sources.
[End of table]
Three of the 16 Firms Also Had Contracts with the U.S. Government:
In fiscal years 2009 and 2010, the U.S. government obligated over $2.3
billion in contracts to 3 of the 16 firms identified in tables 1
through 4.[Footnote 5] The Department of Defense (DOD) obligated over
99 percent of these funds for purchases of fuel and petroleum products
overseas. The firms are presented in table 5 in order of magnitude of
obligations, from greatest to least, as reported by the primary
government contracting database.[Footnote 6]
Table 5: Firms Reported to Have Sold Iran Refined Petroleum Products
between January 1, 2009, and June 30, 2010, and Have U.S. Government
Contracts:
Firm/Country[A]: British Petroleum[D]/United Kingdom;
U.S. government obligations[B]: FY 2009: $1,359,726,907;
U.S. government obligations[B]: FY 2010[C]: $837,505,914;
U.S. government obligations[B]: Total: $2,197,232,821.
Firm/Country[A]: Total[D]/France;
U.S. government obligations[B]: FY 2009: $131,022,563;
U.S. government obligations[B]: FY 2010[C]: $376,716;
U.S. government obligations[B]: Total: $131,399,279.
Firm/Country[A]: Emirates National Oil Company/United Arab Emirates;
U.S. government obligations[B]: FY 2009: $235,067;
U.S. government obligations[B]: FY 2010[C]: $0;
U.S. government obligations[B]: Total: $235,067.
Firm/Country[A]: Total;
U.S. government obligations[B]: Total: $2,328,867,167.
Source: GAO analysis of Federal Procurement Data System-Next
Generation records and other government records.
[A] The country listed in this column is the physical location of the
firm as reported in open sources.
[B] We confirmed that each of these firms had U.S. government
contracts by obtaining official documents and statements that
confirmed the existence of contracts with these firms. For a complete
description of the methodology used to complete this table, see
Enclosure I.
[C] We searched for U.S. government contracts in the first 8 months of
fiscal year 2010.
[D] British Petroleum and Total notified GAO that they stopped selling
gasoline to Iran in November 2008 and May 2010, respectively.
[End of table]
According to the primary governmentwide contracting database, DOD
obligated funds to:
* British Petroleum for the purchase of jet and turbine fuel;
* Total of France for the purchase of jet fuel, gasoline, and diesel;
and:
* Emirates National Oil Company for the lease of fuel storage
buildings.
Agency Comments:
We provided the Departments of State, Energy, and Defense with a draft
of this report for their review. State and Energy provided technical
comments, which we incorporated into the report. The State Department
stated that it did not independently confirm the validity of these
open source reports. The DOD declined to comment.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of the report
to the appropriate congressional committees, the Secretary of State,
the Secretary of Energy, the Secretary of Defense, and other
interested parties. In addition, the report will be available at no
charge on GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 512-8979 or christoffj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Major contributors to this report
include Tetsuo Miyabara (Assistant Director), JoAnna Berry, Jennifer
Bryant, Jon Fremont, Lauren Membreņo, and Pierre Toureille. Technical
support was provided by Colleen Candrl, Debbie Chung, Phillip Farah,
Julia Kennon, Grace Lui, Jodi Munson, and Erin Smith.
Signed by:
Joseph A. Christoff:
Director, International Affairs and Trade:
[End of section]
Enclosure I: Scope and Methodology:
To identify firms reported in open sources to have sold refined
petroleum products to Iran at any time during the period between
January 1, 2009, and June 30, 2010, we analyzed open source
information that GAO energy and information specialists determined to
be credible and comprehensive. We reviewed open sources published
through July 21, 2010, to capture activity that may have occurred
through June 30, 2010. Open source information is overt and publicly
available information, as opposed to covert or classified. It is a key
component of traditional intelligence and information-gathering
agencies, such as the Central Intelligence Agency. Open source
information can provide a broad range of useful data for analysis, but
the validity of an analysis can be compromised if it relies on open
sources that contain inaccurate, imprecise, incomplete, or otherwise
faulty information. We took the following steps to mitigate this risk
in developing our analysis.
First, we relied only on government reports and information, energy
industry trade publications from around the world, and corporate Web
site information to develop a preliminary listing of firms reported in
open sources to have sold refined petroleum products to Iran at any
time during the period between January 1, 2009, and June 30, 2010. We
obtained reports and information from the Department of Energy (DOE),
the Congressional Research Service (CRS), the Organization of
Petroleum Exporting Countries, the International Energy Agency, and
the United Nation's commodity trade statistics database. We
interviewed officials from DOE and the Department of State regarding
the Iranian energy sector. We searched almost 200 industry trade
publications for reports of firms selling refined petroleum products,
including diesel fuel and gas oil, to Iran at any time during the
period between January 1, 2009, and June 30, 2010. We defined the sale
of refined petroleum products as receiving payment for the provision
of any such products through direct sale, shipment, or brokering
(i.e., trading) of these products to Iran. The trade publications were
compiled by Nexis and include Oil Daily, Oil and Gas News, Oil and Gas
Journal, and Platt's Oilgram News, among others. We excluded sources
deemed insufficiently reliable, such as newspaper reports, newswires,
and direct news releases from the Iranian government. We also searched
our sources for specific firms named in U.S. government reports from
DOE and CRS as sellers of refined petroleum products to Iran. We also
searched firm Web sites for press releases and corporate statements
regarding their activity in the sale of refined petroleum products to
Iran or for corrected information that had been publicly reported.
Second, we required multiple corroborating sources of information for
every entry in our tables of firms reported to have sold refined
petroleum products to Iran at any time during the period between
January 1, 2009, and June 30, 2010 (see tables 1 through 4). To
determine whether the preliminary listing of firms resulting from the
above searches was based on sufficient evidence, a team of GAO
analysts reviewed the list and confirmed that one of the following
criteria had been met: (1) at least three standard industry
publications cited the firm as having sold refined petroleum products
to Iran at any time during the period between January 1, 2009, and
June 30, 2010, or (2) the firm provided information on its corporate
Web site about its sale of refined petroleum products to Iran at any
time during this period and at least one standard industry publication
cited the firm's sale of refined petroleum products to Iran at any
time during this period. If not all of the analysts on the team were
completely satisfied that these criteria were met, the firm was not
included in our tables. We also applied the same methodology to
determine whether a firm had stopped selling refined petroleum
products to Iran during the same period. As in all GAO products, our
evidence also had to convince independent GAO fact-checkers--who
confirmed that the appropriate criteria had been met for all firms--
before it could be included in our final listing. Therefore, the firms
listed in tables 1 through 4 represent a minimum number of firms that
sold refined petroleum products to Iran at any time during the period
between January 1, 2009, and June 30, 2010.
Analysts fluent in the appropriate language contacted the firms by
telephone to introduce GAO, explain our project, and obtain an
appropriate point of contact within the firm to officially comment on
the information reported in open sources. We then sent the firms a
letter containing information from tables 1 through 4 concerning the
firms' reported activities. As of August 27, 2010, 9 of the 16 firms
had responded. We incorporated these responses into tables 1 through 4.
To determine the extent to which the 16 firms identified in open
sources as having sold refined petroleum products to Iran also have
contracts with the U.S. government, we searched the Federal
Procurement Data System-Next Generation (FPDS-NG) for references to
these firms. We chose FPDS-NG to determine whether any of these firms
also had contracts with the U.S. government because FPDS-NG has served
as the primary governmentwide contracting database since 1978.
Congress, executive branch agencies, and the public rely on FPDS-NG
for a broad range of data on agency contracting actions, procurement,
and spending.[Footnote 7] The Office of Management and Budget
established FPDS-NG, and the General Services Administration
administers the system.[Footnote 8] More than 60 government
departments, agencies, and other entities submit contract data to FPDS-
NG. The database contains data on obligations, which are recorded when
a government agency enters into a contract to purchase services or
goods.
We searched the FPDS-NG archives for fiscal years 2009 and 2010 (our
search included the first 8 months of fiscal year 2010) using search
terms that would select any record with the same firm name as
identified in any of tables 1 through 4. After matching firms from
these tables with records in FPDS-NG, we obtained the Data Universal
Numbering System (DUNS) numbers for the firms determined to be
identical matches and searched FPDS-NG for these DUNS numbers.
[Footnote 9] With certain exceptions, all firms that do business with
U.S. agencies are required by the U.S. government to register with the
U.S. government Central Contract Registration database and to obtain a
unique DUNS number. We matched all of the data in table 5 to
individual firms' DUNS numbers. Additionally, we matched the firms'
street addresses listed in the Central Contract Registration database
to the firm's officially listed addresses.
We took steps to corroborate key FPDS-NG information by obtaining U.S.
government documents and public statements confirming that the 3 firms
listed in table 5 have U.S. contracts. To do so, we searched the
Department of Defense's Electronic Document Access system[Footnote 10]
to locate copies of relevant contract documents.
Our searches for U.S. contracts only covered firms that we had
identified as being directly involved in the sale of refined petroleum
products to Iran. We included a parent firm or subsidiary only if that
firm had also been reported in open sources as having sold refined
petroleum products to Iran. Therefore, U.S. contracts held by a
subsidiary of a parent firm might not be identified if (1) the firm
that actually sold refined petroleum products to Iran is a subsidiary
of a parent firm, but the open sources identified the subsidiary by a
common name associated with the parent firm; and (2) the parent firm
identified in open sources was not listed in FPDS-NG as the recipient
of the U.S. contract.
[End of section]
Footnotes:
[1] Pub. L. No. 111-195, 124 Stat. 1312.
[2] Pub. L. No. 111-195, § 102, 124 Stat. 1317-1321.
[3] Iran-Libya Sanctions Act of 1996, Pub. L. No. 104-172, §§ 5-6, 110
Stat. 1541, 1543-45, as amended. Other sanctions include a denial of
Export-Import Bank assistance, a ban on issuing licenses to export
controlled technologies to the sanctioned firm, and other sanctions to
restrict imports from a sanctioned person in accordance with the
International Emergency Economic Powers Act. The Secretary of State,
to whom the President has delegated ISA authorities, may waive the
sanctions if the Secretary determines that it is necessary to the
national interests of the United States to do so. Pub. L. No. 104-172,
§ 9; Memorandum: Delegation of Responsibilities Under the Iran and
Libya Sanctions Act of 1996, 61 Fed. Reg. 64,249 (Nov. 21, 1996).
[4] Refined petroleum products include but are not limited to
gasoline, kerosene, diesel fuel, and gas oil. According to the U.S.
Energy Information Administration, refined petroleum products include
but are not limited to gasoline, kerosene, distillates (including No.
2 fuel oil), liquefied petroleum gas, asphalt, lubricating oils,
diesel fuels, and residual fuels. Gas oil is a European and Asian
designation for No. 2 diesel fuel and No. 2 heating oil.
[5] An obligation is recorded when a government agency enters into a
binding agreement to purchase services or goods.
[6] The Federal Procurement Data System-Next Generation (FPDS-NG) is
the primary governmentwide contracting database. More than 60
government agencies, departments, and other entities submit contract
data to FPDS-NG. The database can be accessed at [hyperlink,
https://www.fpds.gov/fpdsng_cms/]. Reporting requirements for FPDS-NG
are in the Federal Acquisition Regulation (FAR), subpart 4.6. FPDS-NG
data are described in FAR 4.602.
[7] FPDS-NG can be accessed at [hyperlink,
https://www.fpds.gov/fpdsng_cms/]. Reporting requirements for FPDS-NG
are in the Federal Acquisition Regulation (FAR) subpart 4.6. FPDS-NG
data are described in FAR 4.602.
[8] For more information on FPDS-NG and other federal procurement data
systems, see GAO, Federal Contracting: Observations on the
Government's Contracting Data Systems, [hyperlink,
http://www.gao.gov/products/GAO-09-1032T] (Washington, D.C.: Sept. 29,
2009).
[9] DUNS numbers are nine-digit identifying numbers obtained by firms
through Dun and Bradstreet to uniquely identify a firm. Dun and
Bradstreet is a leading source of commercial information and maintains
a commercial database with more than 140 million business records.
U.S. vendors must be registered in the U.S. government Central
Contract Registration database prior to the award of a U.S. government
contract, and a firm must have a DUNS number to register. We also
compared the street addresses of the firms listed in tables 1 through
4 with street addresses listed in the Central Contract Registration
database [hyperlink, https://www.bpn.gov/ccr/].
[10] The Electronic Document Access system is a Department of Defense
online system designed to provide acquisition-related information.
[End of section]
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