US demands to see Swiss-Iran gas contract

31 March 2008

BERN – The U.S. has demanded to see a Swiss contract for natural gas supplies from Iran to see whether it violates an American sanctions law against Tehran, the U.S. Embassy in Switzerland said.

A posting on the U.S. Embassy Web site on Sunday raises the question of whether neutral Switzerland’s position as representative of American interests in Iran and Cuba could be affected.

“At this time, the Swiss have a mandate as our protecting power in Cuba and Iran,” the Web site said in response to a “frequently asked question” on whether the Swiss role was “in jeopardy.”

The Swiss have represented U.S. interests in Havana since diplomatic relations with Cuba were broken nearly 50 years ago, and in Tehran since Iranian militants seized the U.S. Embassy in 1979.

The Swiss Foreign Ministry declined to comment on the embassy posting.

Washington, which has already objected to the deal as violating the spirit of U.N. sanctions against Iran, made a formal request to see the contract 17 March, the U.S. Embassy said on its Web site.

That was the same day it was signed in the presence of Foreign Minister Micheline Calmy-Rey during a visit to Tehran.

U.S. Embassy spokeswoman Lisbeth Keefe said Washington had originally asked to see the contract last summer, long before the signing.

The Swiss have yet to produce the contract, the embassy said.

The 25-year contract, worth between EUR 18 billion and EUR 27 billion, is between Swiss energy trading company EGL and the state-owned National Iranian Gas Export Company.

The weekly Zurich-based newspaper SonntagsZeitung said the U.S. had repeatedly told the Swiss that it opposed the deal and that U.S. Ambassador Peter Coneway met with Calmy-Rey about it a week before the signing.

The paper said the U.S. told Calmy-Rey not to go to Tehran.

The embassy reiterated that the U.S. had told the Swiss “that major new oil and gas deals with Iran send precisely the wrong message” to Iran when it is defying U.N. Security Council resolutions over its uranium-enrichment programme.

The Iranian government says it only wants to produce electricity for peaceful uses, but the U.S. and Israel accuse it of seeking to develop nuclear weapons.

The U.S. Embassy said the State Department “closely reviews” oil and gas deals with Iran in view of the U.S. Iran Sanctions Act.

But it declined to answer what it would do if the Swiss deal is found to be in violation of the U.S. law on grounds the question was hypothetical.

Calmy-Rey has said that the contract is in line with Switzerland’s rights as an independent country with its own strategic interests to defend.

Under the deal, Iran will supply EGL with up to 5.5 billion cubic metres of gas a year, which the Swiss company will then sell to European customers.

Concerns have been raised about the heavy reliance of European countries on natural gas from Russia, which in the past has used its monopoly to exert political pressure on its neighbours.

EGL, majority-owned by Axpo Holding AG, has said gas deliveries from Iran will begin in 2009.