This comes at a time when the United States and the United Nations are actively working to discourage the international community from conducting commercial transactions with Iran and its energy sector, in particular.
The World Bank's Multilateral Investment Guarantee Agency (MIGA) provides financial guarantees to secure foreign investments in developing countries, and the U.S. government is one of the agency's largest contributors. U.S. contributions since 2000 have totaled nearly $24 million.
Documents and public filings obtained by FOX News show the MIGA has issued $122.2 million in guarantee coverage for three companies from Thailand and Japan, that have in turn invested a total of $42.8 million in a state-owned Iranian petrochemical company.
The MIGA guarantees insure the three investors — Cementhai Chemicals Company and National Petrochemical Public Company Ltd., both of Thailand, and Itocho Corporation, of Japan — against the risk of "war and civil disturbance," and any potential breach of contract by the government of Iran.
In addition, Itocho is providing the Iranian company, Mehr Petrochemical, with a $96 million shareholder loan, which also is underwritten by MIGA.
Iran's National Petrochemical Co. chairman Kazem Vaziri Hamaneh serves on the board of Mehr Petrochemical, according to Middle East financial industry-watch site, www.Zawya.com. The National Petrochemical is a subsidiary of the Iranian Petroleum Ministry.
First-Time Aid to Iran :
The project marks the first time MIGA has provided such coverage for foreign investment in Iran. The infusion of cash by foreign investors, according to MIGA documents, will enable the Islamic republic to mine the South Pars gas field, a giant offshore gas reserve in the Persian Gulf, and to construct and operate a nearby high-density polyethylene plant, where the gas will be processed for industrial uses.
These projects, a MIGA summary states, will help Iran "diversify the country's exports away from oil" and "contribute to government revenues."
The South Pars project is not MIGA's only thrust into Iran, however. The agency's paperwork for a separate project shows a $5 million equity and loan guarantee provided to a Turkish company whose plants in Iran produce and export polypropylene containers. The documents say Iran's economy is "over-reliant on oil," and boast the Turkish venture will "help diversify Iran's economy ... while introducing state-of-the-art, lean manufacturing techniques that can be replicated for use in other industrial facilities."
At Odds With U.S. Policy?
American and allied officials at the U.N. have been working for years to discourage foreign investment in just such kinds of projects in Iran, fearing they will directly or indirectly aid the Islamic republic's nuclear and ballistic missile programs, as well as the regime's support for terrorist groups across the Middle East.
Last October, the Bush administration designated the Iranian Revolutionary Guard Corps (IRGC) and its elite Quds Force as terror organizations — the IRGC for weapons proliferation, and the Quds Force for support of terrorism. At the time, Treasury Secretary Henry Paulson, with Secretary of State Condoleezza Rice standing by his side, told reporters "it is increasingly likely that if you are doing business with Iran, you are doing business with the IRGC."
Paulson also called on "reputable institutions" not to serve as "bankers to this dangerous regime" and concluded "many banks around the world have decided as a matter of prudence and integrity that Iran's business is simply not worth the risk."
Assistant Secretary of State Sean McCormack disclosed last June that the State Department had been contacting multinational firms and state-owned companies around the world, counseling them against financial transactions with the Iranian regime and its subsidiaries.
"We've talked to Shell Oil," McCormack told reporters June 12. "We've talked to the Chinese national oil company. There have been several others as well ... giving them informational briefings and talking to them about whether or not, really, this is the right time to be making those sorts of big bets on the Iranian energy sector when you have a country that is already under [U.N. Security Council] Chapter 7 resolution," referring to a U.N charter section that deals with international threats.
McCormack continued: "And it raises the question of, well, is this the kind of investment climate that you want to enter into? These are big bets of billions of dollars that people are calculating they're going to get returns over a significant number of years. And if you have that level of uncertainty, I think the business end will make their own calculations about whether or not that's the place where they want to invest their money."
The World Bank has apparently decided otherwise, according to U.S. Reps. Steve Rothman, D-N.J., and Mark Kirk, R-Ill. — a former Bank staffer. They say the global lending institution has "transferred at least $50 million in U.S. and allied taxpayer funding to Iran" over the last six months.
In a letter to Rice and Paulson dated Jan. 30 and obtained by FOX News, Rothman and Kirk argued the World Bank is "undermining the Iran policies of the U.N. Security Council, the United Kingdom, France, Germany and the United States by giving technical assistance, loans and investment guarantees directly to the government of President Mahmoud Ahmadinejad."
The letter urges the Bush administration to "align the World Bank board to the policy" of the U.N. Security Council, by suspending all World Bank loans to Iran and all guarantees on foreign investment in the country.
Contacted by FOX News, a World Bank spokesman noted that MIGA's $127 million in guarantees was approved by the agency back in 2005, and that such guarantees do not involve disbursement of funds unless a claim is made by a foreign investor.
"The World Bank Group complies with UN sanctions on Iran," the Bank's website states, adding: "Arrangements have been put in place to ensure disbursements under project agreements are utilizing banking channels that are not subject to sanctions lists."
A World Bank spokesman later said, "There are no plans to approve any new loans to Iran. These loans ... were designed to help Iran's poorest people and meet basic humanitarian needs."
McCormack told Fox News the State Department only just received the Rothman-Kirk letter, and will be replying to it shortly.
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