Business contacts and commercial agreements between the United States and Iran, interrupted four years ago when Ayatollah Ruhollah Khomeini came to power, are slowly, haltingly resuming.
Diplomats, business executives, and scholars with contacts in Iran say a new pragmatism is asserting itself in the wake of the country's revolutionary turmoil, and that some Iranians are again willing to deal with U.S. suppliers or looking ahead to a time when they will be free to do so.
Known U.S. direct exports to Iran amounted to about $200 million last year, according to Commerce Department figures. Most of the exports were wheat and rice, but export licenses issued by Commerce in recent months show the Iranians are also buying electronic and scientific equipment.
Official contacts between the two governments remain confined to the international tribunal in The Hague, the Netherlands, which was set up under the terms of the Algiers agreement that gained freedom for the American hostages in Tehran. The tribunal is considering billions of dollars in claims against Iran by U.S. corporations that formerly did business there, and Iran's claims against Washington for delivery of vast amounts of weapons and military equipment that were held back when the revolution toppled the regime of the late Shah Mohammed Reza Pahlavi.
The Iranians have paid for some of the weaponry and even have taken title to some of it, according to State Department sources, but the U.S. government has refused to issue the licenses required to export it. If the tribunal should order the release of any of the military equipment, the United States is unlikely to comply, State Department sources said. The U.S. position is that Iran knew the military equipment was subject to export restrictions and is now trying to use the Hague tribunal as a back door to gain access to restricted materiel.
Despite the absence of official relations between the two countries, however, there is no legal barrier to trade by private business, and several sources report indications that this is resuming.
Just within the past month, according to well-informed sources, a group of Iranian businessmen and technocrats proposed holding an informal, off-the-record meeting in London with prospective U.S. business contacts. Iran's religious rulers frown on overt dealings with Americans, but "these guys are looking ahead to the time after Khomeini when they have to run the country," said a business analyst with extensive Middle East experience.
The new Iranian approach is said to be discernible in the way the Iranians have begun to settle some of the claims filed by American companies in the Hague tribunal. Iran appears to be giving priority to companies that would logically be future suppliers of needed goods and services, participants in the cases say.
"The pattern has been that Iran will discuss settlements with companies, at least some companies, when it wants to get back into commercial relations with them," said R. Markham Ball, an attorney who represents U.S. claimants. James R. Ukropina, general counsel of Santa Fe International Inc., now a subsidiary of the Kuwait Petroleum Co., said he had "heard rumors" that Iran would settle outstanding claims filed by oil field equipment suppliers if they would agree to go back into Iran and help rehabilitate the country's damaged oil fields.
More than 3,700 claims were filed with the special tribunal, mostly by U.S. companies against Iran, but several by Iranians against the United States--including the military claims and a demand for compensation for the former Iranian embassy here.
Of the 965 claims for amounts over $250,000, only 35 had been adjudicated or settled by April 7, according to the State Department. The largest award was $7.62 million paid to Pfizer Inc., the pharmaceutical company. E. R. Squibb & Sons Inc. got $7.35 million. A Pfizer spokesman said his company has not been asked to resume business in Iran, but he pointed out that pharmaceutical products are readily available to Iran from suppliers in Eastern Europe.
A $1 billion fund in a Netherlands bank was set up initially by Iran to cover outstanding claims. That amount could easily be wiped out by the pending claims, but the fund is being replenished by interest accumulating on the account. The Iranians are required to make additional funds available if the balance falls below $500 million, or face seizure of Iranian assets by companies trying to collect outstanding awards, according to attorneys involved in the claims process.
Bank claims are being handled through a different process and paid out of two other funds.
The largest outstanding claim, filed by Standard Oil Co. of Indiana (Amoco), is for $1.4 billion, more than is in the kitty. The claim is for property seized by Iran, Amoco's 50 percent share of a petrochemical company operated with Iran's national petrochemical company and 50 percent of the production in four oil fields discovered by Amoco and operated jointly with the Iranian National Oil Company.
Amoco's claim asserts that the assets were "effectively expropriated" on Aug. 1, 1979. Amoco personnel left at the end of 1978, when the revolutionary ferment that brought down the shah was at its height, and the Iranians refused to let them come back when production resumed in about April 1979, according to Amoco. In August 1980, Amoco was informed that its contracts had been "nullified" by a special Iranian government committee, according to Brice Clagett, an attorney representing Amoco.
Another major claim, for $118 million, was filed by E. I. duPont de Nemours & Co. DuPont alleged "breaches of contract, expropriation of Du Pont's equity interest in, and mismanagement of" a joint-venture synthetic fiber plant.
For the most part, attorneys involved in cases before the tribunal say the system is functioning smoothly, though attorneys for American claimants say Iran often attempts to delay the proceedings and substitutes revolutionary rhetoric for legal argument.
"My own perception as a lawyer involved in the process is it's working rather well. It's a massive undertaking," said Thomas Shack, an attorney who represents Iran in the United States. The process is complicated by differences of language and culture, he said. Briefs, for example, are filed both in English and in Farsi, which is read from right to left, so that page and line references are not the same in both texts.
The orderly playing out of the settlement process and the apparent new pragmatic approach by the Iranians do not mean that American corporations are eager to enter into new business relationships with Iran, even cash sales. Some have refused outright to respond to Iranian requests to supply oil field equipment, medical instruments and aircraft parts, possibly out of fear of antagonizing Arab customers who do not want to see an Iranian victory in its long war with Iraq.
George Barrington, vice president for international marketing at the Beech Aircraft division of Raytheon, said Beech has had "some inquiries" about supplying spare parts for military trainers but "we just don't respond. The account is open but we don't service it. We're not interested."
But the U.S. Chamber of Commerce has kept intact the U.S.-Iran Business Council organization that it set up in the heyday of Iran-U.S. trade. "It isn't doing anything, but every time we proposed getting rid of it, our members said no, keep it going. They're looking ahead," a chamber official said.
At the height of U.S.-Iranian friendship, in 1976, Secretary of State Henry A. Kissinger signed an agreement with the shah's government that set trade volume between the two countries at a projected $40 billion over five years, not counting military sales. Despite the latest contacts, it will clearly be many years, if ever, before figures like that are approached again.
Current U.S. imports from Iran are negligible--a few carpets and little else. The true volume of U.S. exports is not known, partly because many are handled through European agents and partly because there are no special restrictions on trade with Iran and many transactions require no export license. The Boeing Corp., for example, says it is making no direct sales of parts to Iran's national airline, but the airline is obtaining parts from other sources.
In the three months from Nov. 1 to Jan. 31, the Commerce Department approved 13 requests by U.S. exporters for licenses to ship restricted goods to Iran, either directly or by reexport from Europe.
The total listed value was $2.2 million. The largest transaction was for $1 million worth of computer equipment to be reexported from France. The smallest was for $53 worth of quartz crystals.
Commerce rejected two applications by unnamed U.S. companies for permission to ship $38 million worth of military vehicles to Iran, on the grounds that it would contribute to instability in the Middle East.