DAR AL HARB - GERMANY / U.S.A.: GERMANY NEGOTIATES DEAL, U.S.A. WARNS FOREIGN COMPANIES AGAINST STRIKING DEALS WITH IRAN

U.S. warns foreign companies against deals with Iran

WASHINGTON: The United States said Wednesday that foreign companies should think twice about striking deals with Iran, after a German company announced that it is in talks to buy liquid natural gas from Tehran.

The warning comes as western countries discuss tightening sanctions against Tehran and despite calls from the U.S. for Europe, and particularly Germany, to diversify its supply of gas to stem Russia's growing monopoly in the market.

Tuesday, utility E.On AG, Germany's largest natural gas importer confirmed the talks with Tehran.

"We applaud the company's focus on diversifying its supply of gas to help guarantee reliable supplies," State Department spokesman Sean McCormack said Wednesday. "However, we are a little surprised by the selection."

McCormack added that the United States doubted whether Iran would be a reliable supplier. He said that companies should consider Iran's defiance of the international community's demands that it suspend uranium enrichment activities before making any deals and should weigh ongoing talks to tighten sanctions.

"We are in a time now where it should not be business as usual in terms of exchanges, business exchanges with Iran," McCormack said. "I'm not saying that we are trying to cut off business exchanges with Iran, but companies need to look closely at what their interactions are and with whom they are dealing."

Iran's refusal to freeze all its enrichment activities prompted the U.N. Security Council on Dec. 23 to impose sanctions targeting the country's nuclear and missile programs and the individuals, companies and organizations involved in them. Diplomats from the United States, Britain, France, China, Russia and Germany have been discussing the possibility of further sanctions, but no agreement has yet been reached.

McCormack said that the potential for tighter economic sanctions posed a risk for companies thinking about business dealings with Iran.

"If there is an increased risk involved in some of those transactions, I think it only stands to reason that some of those businesses are going choose not to do business with the Iranian government," he said.

E.On is seeking a long-term supply of liquid natural gas, which comes in special refrigerated ships instead of the pipelines that bring gas to Germany from Russia.

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