REFILE-Glencore says Iran metals swap deals did not violate sanctions – by Louis Charbonneau (Reuters U.S. – May 24, 2013)

UNITED NATIONS, May 23 (Reuters) – Swiss-based commodities giant Glencore Xstrata said on Thursday that it had done nothing wrong when it engaged in metal swaps with Iran, rejecting a suggestion by U.N. experts that such bartering could have been a way of evading sanctions against Tehran over its nuclear program.

A confidential U.N. Panel of Experts report seen by Reuters on Wednesday said alumina-for-aluminum swap deals with Iran by Switzerland-based commodities giants Glencore Xstrata and Trafigura could have been a way to bypass international sanctions.

A Glencore spokesman said the company broke no regulations and did not violate the sanctions. Trafigura did not immediately respond to Reuters’ request for comment.

Reuters reported on March 1 that Glencore had supplied thousands of tons of alumina to an Iranian firm that has provided aluminum to Iran’s nuclear program. Afterward, Trafigura acknowledged it had also traded with the same Iranian firm.

Glencore has confirmed the deals with Iran but insisted it had no knowledge that the company it was supplying alumina to – the Iranian Aluminum Company (Iralco) – was in turn providing aluminum metal to Iran Centrifuge Technology Co (TESA), which the European Union sanctioned in December 2012.

In a February statement to Reuters, Glencore said it first learned about the TESA-Iralco relationship in December and immediately “ceased transactions” with Iralco. It said its last actual trade as part of the barter arrangement was in October 2012, two months before the EU move.

Glencore acknowledged that it signed the barter deal with Iralco in August 2011, saying it was perfectly legal and denied any wrongdoing by the firm or attempts to help Iran evade sanctions. It declined to provide details about the bartering.

Swiss authorities have said they saw no evidence of U.N. or Swiss sanctions violations by Glencore, but the U.N. experts, who monitor compliance with the Iran sanctions regime, raised the possibility that the swap deals were a means of flouting restrictions on trade with Iran.

“If confirmed, such transactions may reflect an avenue for procurement of a raw material in a manner that circumvents sanctions,” the 49-page report said in reference to the media reports on Glencore’s and Trafigura’s swap deals. “The companies involved have stated that they have halted those transactions.”

Western powers and their allies suspect Iran is amassing the capability to develop nuclear weapons. Tehran, which is under U.N., EU and U.S. sanctions for its atomic program, rejects that allegation and insists its nuclear ambitions are limited to the peaceful generation of electricity.

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