Reagan administration restrictions on the sale of energy equipment to the Soviet Union are so broad that as many as a dozen British companies with contracts worth almost $140 million are covered even though they have nothing to do with the Siberian gas pipeline, officials said today.
The existence of this little-known aspect of the export ban helps explain why the British are so eager to persuade President Reagan to reconsider his decision, made in response to the imposition of martial law in Poland. The value of all British contracts with Moscow in the energy field is estimated at about $400 million--half the annual value of British exports to the Soviet Union.
The companies that are not involved with the pipeline but are still included in the U.S. ban all have some American connection that could make them subject to penalties under the U.S. Export Administration Act if they attempt to fulfill their contracts, officials said. They mainly are firms selling drilling equipment and other gas and oil technology, and some have been dealing with the Soviets for many years.
Members of the North Atlantic Treaty Organization issued a statement in Brussels Thursday calling inadequate the Polish government's latest moves to ease martial-law restrictions. Speaking after a meeting of ambassadors of the 16-member alliance, a spokesman said the steps fell short of meeting the criteria for a lifting of sanctions by NATO members.
In Washington, State Department officials who asked not to be identified said the sanctions were drawn to specifically ban all energy-related equipment to the Soviet Union, not just material to be used for the pipeline. They said that while the administration was aware of British losses, there were no plans to narrow the scope of the ban to allow non-pipeline equipment to be exported.
The $140 million figure for non-pipeline-related losses "sounds reasonable," said Jack Brougher, an international trade specialist with the Commerce Department. He said the department was aware that five or six British firms would be affected by the sanctions, "but we assumed there would be others." Commerce has estimated total losses of $1.6 billion to all European companies due to the ban.
The British Department of Trade, in response to a request, said it has compiled a list of the firms but declined to release it on the grounds that the companies have requested secrecy. A lawyer for one of the companies said his firm--which he also declined to name--stood to lose $30 million in orders, at the cost of hundreds of jobs here and in Belfast, where unemployment is even more serious.
Britain's high unemployment rate--currently at 13.5 percent--is the main factor behind the unhappiness here over the U.S. sanctions.
Britain has invoked its own trade-protection law to show its disapproval of the administration moves. But officials acknowledge that the law would have little practical effect on British firms with American interests should the United States choose to impose heavy penalties on companies that continue selling to the Soviets.
At the least, British trade officials say, they would like the U.S. restrictions made less comprehensive. "Why should someone who has been working for years with the Soviets on oil drilling have to stop because the pipeline became a target?" asked one official. "It doesn't make sense."
British officials yesterday made clear that, unlike France and Italy, they would not directly order companies to defy the U.S. embargo, but will take whatever steps are available to defend those companies that go ahead with contracts. The main company affected here is John Brown Engineering, which holds a $200 million order for turbines for the pipeline.
As many as six other British companies have pipeline-related deals worth about another $60 million. Then there are the estimated 12 others, with contracts worth $140 million, whose gas and oil equipment orders also fall under the restrictions.
The British resent the sanctions in part because they believe U.S. policy makes no allowance for the economic needs of financially troubled allies such as Britain, where every export contract is regarded as a substantial plus. Foreign Secretary Francis Pym was in Washington today to explain the British position to senior administration officials.