Iran sanctions and PerkinElmer …

August 31, 2010

The U.S. has restricted a slew of exports to the Islamic Republic of Iran. So when The Australian published an article (payment required) last spring describing a trade-show booth in Tehran that was showcasing an atomic absorption spectrometer made by Waltham, Massachusetts-based PerkinElmer (PKI), the Securities and Exchange Commission took notice.

In a June 22 letter (PDF) to the company, Cecilia Blye, chief of the SEC’s Office of Global Security Risk, wrote:

“Iran is identified by the State Department as a state sponsor of terrorism, and is subject to U.S. economic sanctions and export controls. … Please describe to us the nature and extent of your past, current, and anticipated contacts with Iran, whether through subsidiaries, distributors, or other direct or indirect arrangements.”

After all, Blye wrote, PerkinElmer hadn’t said anything in its 10-K about sales in Iran; the company should “address materiality” of any connections with Iran, taking into account “the potential impact of corporate activities upon a company’s reputation and share value.” Blye also wanted to know whether any PerkinElmer devices that turned up in Iran “have weapons or other military uses…”

PerkinElmer’s general counsel, Joel S. Goldberg, responded speedily, just eight days later: PerkinElmer wasn’t exhibiting anything in Tehran; the former distributor cited in the article, called SamaMicro, hadn’t done any business with PerkinElmer in more than five years (since U.S. sanctions were imposed); and PerkinElmer has repeatedly refused to do business with the distributor despite its periodic inquiries. Goldberg continued:

“If SamaMicro displayed PerkinElmer equipment at the 2010 Iran Oil Show, it did so without the Company’s knowledge, authorization or involvement.”

Goldberg did note that the company had heard of another instance of its equipment surfacing in Iran. The details are partly redacted, leaving many answers tantalizingly vague, but it appears that one of PerkinElmer’s AutoDELFIA instruments was installed at an unnamed location, with its main serial number “removed.” The device had been shipped elsewhere “for medical end-use by a hospital” in a redacted location.

“The shipment was in compliance with applicable U.S. export control law. Indeed, consistent with our export compliance requirements, the shipping invoice for this order properly declared: ‘These commodities or technical data are licensed by the United States for the ultimate destination of: [**]. Diversion contrary to US law is prohibited.’ “

And PerkinElmer also has learned of “a second PerkinElmer product awaiting customs clearance in Tehran,” though the original recipient and end user’s names were also redacted. The company has suspended shipments to an unnamed customer, and “is actively investigating whether any unlawful diversions occurred,” Goldberg wrote.

He also said the equipment doesn’t generally have any military or weapons uses. The atomic absorption spectrometer that sparked the initial article in The Australian is used to suss out “the concentration of specific metal elements in a sample,” for everything from soil and water testing to measuring lead exposure in human blood. The AutoDELFIA instrument is used mainly for newborn genetic-screening tests and other medical applications.

That may settle the issue: On July 16, the SEC told PerkinElmer it had no more questions. Still, PerkinElmer itself said it had contacted the U.S. Commerce Department’s Office of Export Enforcement about the incident after learning of the Australian article.

And then, of course, there’s a disgruntled competitor in Australia — Melbourne-based GBC Scientific Equipment, which was barred last year from selling two spectrometers to Pakistan. The Australian quoted GBC’s chief executive, Ron Grey, as being “very sceptical” and unhappy about various reports that his “competitors are active in these markets” that are otherwise barred to him.

Image source: One World — Nations Online

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