Sony: Sanctioned Iran firms got gear it sold via Dubai

Bloomberg

Sony Corp. said it sold almost $13 million (¥1.3 billion) in video and medical equipment to dealers in Dubai who resold it in Iran, including to groups under official U.S. sanctions.

In a U.S. filing Thursday, Sony said it sold broadcast equipment, security cameras and video-conferencing gear to dealers in Dubai, in the United Arab Emirates, that resold or planned to re-market the products to groups that included the Iranian police’s Information Technology Department and the state-run Islamic Republic of Iran Broadcasting media corporation.

The law permits the United States to levy fines against companies that supply products used to oppress Iran’s populace. Sony’s dealings were outlined under requirements that businesses report transactions with Iran or other parties sanctioned for programs relating to terrorism or the proliferation of weapons of mass destruction, the consumer electronics giant’s filing said.

“International companies that sell equipment to designated Iranian entities like IRIB run the risk of U.S. sanctions as well as the moral opprobrium from aiding the regime’s repression of the Iran people,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington-based group that researches international terrorism.

Sony understands that “and maintains policies and procedures designed to ensure that its transactions with Iran and elsewhere have been conducted in accordance with applicable economic sanctions laws and regulations,” the filing said.

Penalties or sanctions taken against the company could be material if any government disagrees, Sony said, adding it registered a profit of around $500,000 from the sales.

U.S. Treasury Department spokesman John Sullivan declined comment on specific companies and possible investigations. Companies can get a special permit to sell to Iran, he said, and some medical equipment is exempt from the U.S. sanctions.

Since Sony is based in Tokyo, it’s not clear if the company violated any provisions of a U.S. law intended more to capture domestic businesses with overseas subsidiaries, said Danforth Newcomb, an attorney in the sanctions practice at the New York law firm Shearman & Sterling.

“It turns on a lot of the detail and careful reading of what they did,” Newcomb said. “The U.S. has adopted extraterritorial sanctions designed to reach non-U.S. persons, but those sanctions are considerably more tailored because they have significant foreign policy ramifications.”

One dealer was a subsidiary of IRIB, Sony acknowledged in the filing. The company also reported sales of medical instruments, including printers, paper and monitors it said were intended for the Ministry of Health.

Jim Kennedy, a Sony spokesman in New York, had no comment.

Sony said it made the disclosure under the Iran Threat Reduction and Syria Human Rights Act of 2012 and related amendments to the Securities Exchange Act of 1934.