The Cable

Senators accuse China of violating sanctions against Iran

Just before Chinese President Hu Jintao's arrival to Washington, two leading senators accused China of violating sanctions against Iran and sent a warning to President Barack Obama that Congress will go after Chinese companies if the abuses don't stop.

"We appreciate China's decision to support U.N. Security Council Resolution 1929, as well as China's backing of prior U.N. sanctions against Iran. However, we believe that China's record on sanctions enforcement and nonproliferation is inadequate and disappointing," Sens. Joseph Lieberman (I-CT) and Mark Kirk (R-IL) wrote to President Obama on Jan. 14 in a previously unreported letter.

The senators cited numerous reports that China is supplying crucial materials to aid Iran's nuclear and missile programs and alleged that Beijing continues to give monetary and material support to Iran's energy sectors, including the delivery of refined petroleum products, which could provoke penalties under U.S. laws passed by Congress, including the Comprehensive Iran Sanctions Accountability and Divestment Act that Obama signed into law in July, 2010.

The senators specifically named the state-owned China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (SINOPEC) as firms that could come under U.S. penalties.

"We urge you to warn President Hu that the U.S. will be forced to sanction these companies if they do not quickly suspend their ties with Iran," the senators wrote.

Last October, the Government Accountability Office (GAO) released a new report that identified 16 companies as having sold petroleum products to Iran between Jan. 1, 2009, and June 30, 2010. Of those 16, the GAO reported that five have shown no signs of curtailing business with Iran. Three of those companies are based in China, one in Singapore, and one in the UAE.

Japan and South Korea are among the countries that have scaled back their dealings in Iran in response to U.S. pressure. But analysts fear that Chinese corporations could move to backfill the space left in Iran by countries that are now cooperating with international and U.S. sanctions measures.

Also today, one of the key authors of the bill, former House Foreign Affairs Committee chairman Howard Berman (D-CA), also called on Obama to press China to enforce energy sanctions on Iran.

"A key area of concern for the United States is the threat posed by a nuclear-armed Iran, a threat that would also jeopardize China's long-term security," Berman said in a statement. "As President Obama sits down with President Hu this week, securing greater cooperation from the Chinese government in stopping Iran's nuclear weapons program must be at the top of the agenda."

China is currently Iran's largest trade partner, its largest oil purchaser and its largest foreign investor. China-Iran trade is currently around $30 billion per year and Iranian officials have predicted it could reach $50 billion over the next five years.

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