SEC asks info on terror state ties

LONDON – The Securities and Exchange Commission has sent letters to U.S. companies requesting they disclose any business dealings with terror-supporting states, a lawyer specializing in sanctions told Dow Jones Newswires.

The U.S. financial watchdog’s inquiries to European companies, such as ENI SpA of Italy, Total SA of France and Norsk Hydro ASA of Norway, about possible commissions paid in Iran are already known. But Michael Burton, a Washington-based lawyer with Miller and Chevalier, said the letters – of which he has seen several – had also been sent to U.S. companies, a move underscoring the shift in the SEC’s role following September 11.

Burton said letters were sent up until June, and were addressed to oil exploration and production, and services companies based in the United States, as well as to companies in other sectors such as chemicals.

However the lawyer declined to identify any of the corporate recipients of the letters, for confidentiality reasons.

Burton said the SEC had requested information from these companies on their business in Iran, Sudan and Syria – which are all subject to U.S. sanctions – or Libya – where the U.S. embargo was almost completely lifted in September 2004.

Burton said the letters sought information on transactions made by the companies within those countries, as part of the U.S.’s application of anti-corruption laws and sanctions. But he said the letters also strongly suggested that companies disclose in filings any dealings in countries designated as terror-supporting states.

The SEC declined to comment.

Burton, who is based in Washington, said the letters have been sent by the SEC’s Office of Global Security Risk, a special division that monitors companies with operations in Iran and other countries under U.S. sanctions, which were created by the U.S. Congress in 2004.

But, he added, the regulator was also addressing investors’ demands, by being “concerned that shareholders have access to that information following September 11.”

“Certain institutional investors, for instance, have expressed interest in whether companies they invest in conduct business in those countries,” Burton said.

Burton said the SEC agreed to expand its role by looking at the business of companies working in terror-supporting states, as it felt it respected “the interest of U.S. capital markets.”