Rolls-Royce denies reports it exploited sanctions loopholes to trade with Iran

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Rolls-Royce has denied reports that it avoided US sanctions by exploiting a loophole to sell equipment to Iran.

The British engineering giant sold turbines worth millions of pounds over to the Iranian government over decades when it was subject to economic sanctions, the Guardian reported, citing a leaked internal memo. The company made no mention of its Iranian business on its website until sanctions were softened earlier this year.

The deals represented a significant risk for the company, which generates a quarter of its sales in the US, with a significant proportion coming from the Department of Defence.

Sanctions were initially imposed after the Iranian revolution in 1979 and tightened in 1995 as fears grew over the country’s attempts to develop nuclear weapons.

The documents reportedly show that Rolls-Royce supplied almost 100 industrial turbines, 69 of which were supplied to the National Iranian Oil Company, which was subject to sanctions. When controls were tightened it continued to sell the equipment but sold spare parts and engineering assistance rather than complete turbines.

"Rolls-Royce refutes any accusation that it has traded 'in secret' in Iran or that it circumvented US sanctions," a Rolls-Royce spokesman said.

"We conduct business in all countries, including Iran, in accordance with all relevant UK, EU or other national sanctions and export control regulations. This includes applying for export licenses, when they are required, and complying strictly with their terms and conditions."

Rolls-Royce has been under investigation by the Serious Fraud Office after allegations that it paid bribes to middlemen to secure contracts around the globe.

The four-year probe was widened in November after leaked emails revealed links between Rolls-Royce and oil and gas company Unaoil, which acted as an agent for multinational companies.

Police raided Unaoil’s Monaco offices in April after the documents allegedly showed the company paid bribes on behalf of dozens of companies. Unaoil denies that it acted corruptly.