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Caterpillar Inc.

Caterpillar Inc.

Industry: 
Construction
Value of USG Contracts: 
2000
Symbol: 
NYSE:CAT
States: 
IL
Country: 
USA
Sources: 

"Solar Turbines, a division of Caterpillar, requested this license because it wanted to bid on a project to build a natural mixing station needed by the Turkish government-owned pipeline company, Botas. In its application, Solar Turbines acknowledged that the mixing station in Sivas, Turkey, would serve a pipeline that carried Iranian gas through Turkey and into Western Europe.

The United States has a clear-cut policy that it does not support pipelines that deliver Iranian gas to customers outside that country’s borders, for the simple reason that Iran’s huge natural gas resources prop up its economy and help finance pursuits like its nuclear program. But in this case, the company argued, the station would primarily serve a different, United States-supported pipeline called the Shah Deniz, which pipes gas from Azerbaijan to Turkey, and thus would reduce reliance on Iranian gas. In fact, according to Botas and Turkish Embassy officials, the opposite was true. A Turkish diplomat, Tuncay Babali, said that back in 2005, when this license was issued, 'the Sivas station was primarily for Iran gas, actually.' And that is still the case today, according to Oguz Zimamoglu, the head of Botas's central gas control unit. 'Primarily the gas flowing from Sivas is Iranian gas,' he said. A Caterpillar spokesman, Jim Dugan, said the company relied on the best information it had in making its application, while OFAC said in a statement that its decision was the product of an interagency review that found that 'notwithstanding an Iranian nexus,' granting the license was in America’s foreign policy interest. In the end, another company won the right to build the station. But Elliott Abrams, who at the time served as the deputy national security adviser and should have been involved in any interagency review, said the fact that Solar Turbines was allowed to bid raises questions about the government’s vetting process. He did not recall any debate on the issue, which he called 'surprising' because 'the issues are significant.'" (New York Times, "Licenses Granted to U.S. Companies Run the Gamut," 12/24/10)

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"Caterpillar, through foreign subsidiaries, sold heavy machinery to independent dealers that resold to users in Iran, where the company's equipment can be found at work in Iran’s oil and gas sectors. In addition, a Canadian subsidiary that Caterpillar acquired in 2008, Lovat, sold tunnel-boring equipment to Iran in the late 1990s for municipal projects, said a spokesman, Jim Dugan. Iran has since constructed tunnel complexes to shelter its uranium enrichment complexes, a fact noted in a letter sent last month to the company by United Against Nuclear Iran (UANI), a group that mounts public pressure campaigns against corporations doing business there. Caterpillar also sells products like armored bulldozers to the United States military. On Feb. 26, the company announced that while its sales to Iran amounted to less than 1 percent of worldwide revenue and complied with American law, it would now go “a step further” by prohibiting its foreign subsidiaries from accepting orders for machines, engines or parts that they know it will end up in Iran."  The company has received $2 billion in benefits and revenue from the US government to pursue business in Iran.  They have since withdrawn their investments in Iran.  (The New York Times, "Profiting from Iran, and the US," 3/6/2010)

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Caterpillar has performed business in Iran through its wholly-owned subsidiary Lovat, (a Canadian tunnel-boring machine company), and Arya Machinery, which states it is the “exclusive dealer of Caterpillar in Iran.”

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“Caterpillar Inc., of Peoria, Ill., says that under current U.S. sanctions its foreign subsidiaries may, under some circumstances, sell its heavy machinery to independent dealers that resell to users in Iran.

Closely held Arya Machinery, with offices in Tehran, markets itself on its Web site as Iran's exclusive dealer of Caterpillar equipment. A senior sales executive at the company said Arya buys equipment from a Caterpillar subsidiary in Europe.

A Caterpillar spokesman declined to comment about Arya, but said in a statement that Caterpillar has no assets, operations or employees in Iran and is in "full compliance with all applicable laws.” (The Wall Street Journal, "U.S. Enforces Existing Sanctions on Iran," 10/2/09)

Lovat

Lovat, a manufacturer of tunnel boring machines (TBMs) is a wholly-owned subsidiary of Caterpillar acquired in April 2008. (AP, “Caterpillar acquires tunnel boring company,” 4/2/08) Iran has been constructed tunnels to obscure and shield its nuclear program. (The New York Times, “Iran Shielding Its Nuclear Efforts in Maze of Tunnels,” 1/6/10)

Lovat’s business in Iran:

  • On its full worldwide contacts list, Lovat lists Mr. Amir Kheradmand of the Tehran-based “Tunnel Boresh Machine” as its main Iran contact. (Company Website)   
  • Lovat’s website lists a completed drainage project in Tehran in its “Project section.” The project used a Lovat tunnel-boring machine. (Company Website)
  • The December 2009 article World Tunnelling magazine lists two recently completed Lovat tunneling projects for surface water collection in Khayyam and Bahmanyar. Lovat used the same tunnel-boring machine for both projects. (World Tunnelling, “Iranian TBMs continue steady march,” 12/23/09)

Arya

 “Arya Heavy Machinery (Exclusive dealer of Caterpillar in Iran) has been the Sole authorized representative for the supply of Caterpillar machines, engines, parts and services in Iran since August 18, 2005.” (Company Website

The Arya website lists four offices in Iran with its head office in Tehran. (Company Website

Arya sells a wide array of Caterpillar power generation equipment and machines in Iran. (Company Website)

Billboard

Caterpillar Billboard Graphic

 

UANI Billboard in Peoria