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GAO-12-321R: 

Washington, DC 20548:
United States Government Accountability Office: 

January 24, 2012: 

The Honorable Joseph Lieberman: 
Chairman: 
The Honorable Susan M. Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Subject: Firms Reported in Open Sources to Have Sold Iran Refined 
Petroleum Products Declined Since June 30, 2010. 

Iran's involvement in illicit nuclear activities, support for 
terrorism, and abuse of human rights has led the United States, as 
well as other nations, to impose sanctions in an attempt to curb these 
activities.[Footnote 1] According to the Department of State (State), 
the sanctions are intended to, among other things, target sectors of 
the Iranian economy that are relevant to Iran's proliferation 
activities and block the transfer of weapons and technology related to 
Iran's missile and nuclear programs.[Footnote 2] One of the measures 
enacted by the United States, intended to limit resources available 
for proliferation and support for terrorism, imposes sanctions on 
firms that sell refined petroleum products to Iran. 

According to the Department of Energy (DOE), Iran has limited refinery 
capacity and has been reliant on imports of refined petroleum products 
to meet domestic demand for gasoline. Foreign commercial activity in 
Iran's energy sector has also declined in recent years, limiting 
Iran's ability to produce gasoline to meet demand, much less to export 
refined petroleum products on world markets. However, according to 
State and DOE officials, Iran has attempted to reduce its dependence 
on foreign refined petroleum products by reducing gasoline subsidies 
to its citizens in order to reduce demand, converting petrochemical 
facilities to produce gasoline, as well as expediting the construction 
of new refineries or the expansion of current refineries. In 2009, 
Iran imported approximately 130,000 barrels of gasoline per day, but, 
according to DOE, in 2010 the amount of gasoline shipped to Iran 
declined to an estimated 78,000 barrels per day, and by July 2011 it 
had declined to 50,000 barrels per day, according to Petroleum 
Intelligence Weekly. 

The United States has imposed multiple sanctions through various 
legislation and executive orders, including the Iran Sanctions Act of 
1996 (ISA)[Footnote 3]. On July 1, 2010, the President signed into law 
the Comprehensive Iran Sanctions, Accountability, and Divestment Act 
(CISADA) of 2010, which amends ISA, among other provisions.[Footnote 
4] ISA, as amended, provides for sanctions to be imposed against 
persons, including foreign firms, who engage in certain activities in 
Iran's energy sector, including selling or providing Iran with refined 
petroleum products.[Footnote 5] In 2010, we identified, in open 
sources, 16 firms that reported having sold refined petroleum products 
to Iran from January 1, 2009, to June 30, 2[Footnote 6]010. This 
report updates the findings of the 2010 report. 

As you requested, this report (1) provides a list of firms reported to 
have sold refined petroleum products to Iran from July 1, 2010, 
through December 31, 2011, and firms reported to have stopped sales to 
Iran since the 2010 report, and (2) identifies which of those firms 
have contracts with the U.S. government. We defined the sale of 
refined petroleum products as receiving payment for the provision of 
any such products through direct sale, shipment, or brokering (i.e., 
trading) of these products to Iran. 

To accomplish our objectives, we reviewed open source information, 
including industry and trade publications, corporate reports and 
statements, and Securities and Exchange Commission filings. We listed 
firms that were reported to have sold Iran refined petroleum products 
if at least three reputable industry publications and/or the firm's 
corporate statements reported the firm to have sold or provided 
refined petroleum products to Iran from July 1, 2010, through December 
31, 2011. We also listed the firms that were reported to have stopped 
sales to Iran if open source information reported and/or the firm 
indicated in a letter to us that the firm had stopped sales by June 
30, 2010, and if we did not find open source reports of sales to Iran 
during the time period. In cases where dates of activity were not 
specified in the reports, we used the date of publication for the date 
of activity. We provided the firms that were reported to have sold 
refined petroleum products to Iran an opportunity to comment on our 
findings. While we spoke with U.S. intelligence agency officials, we 
only used unclassified, open source information for this report. To 
determine the firms that also had contracts with the U.S. government, 
we searched the Federal Procurement Data System-Next Generation (FPDS-
NG), the primary government-wide contracting database since 1978, for 
active contracts from July 1, 2010, through December 31, 2011. We 
first searched in FPDS-NG for firms identified as having sold refined 
petroleum products to Iran. We did not review the contracts or 
documents underlying these transactions reported in open sources and 
did not independently verify these transactions. Further, we did not 
attempt to determine whether reported sales of refined petroleum 
products to Iran by the firms listed in this report met the legal 
criteria of sanctionable activities specified in ISA, as amended by 
CISADA. The Secretary of State is responsible for making such 
determinations. In a related report, we described State's process for 
enforcing energy related sanctions under ISA, including those for the 
sale of refined petroleum products to Iran.[Footnote 7] See enclosure 
I for a full description of our scope and methodology. 

We conducted our work from September 2011 to January 2012 in 
accordance with all sections of GAO's Quality Assurance Framework that 
are relevant to our objectives. The framework requires that we plan 
and perform the engagement to obtain sufficient and appropriate 
evidence to meet our stated objective and discuss any limitations in 
our work. We believe that the information and data obtained, and the 
analysis conducted, provide a reasonable basis for any findings and 
conclusions. 

Summary: 

Based on open source information, four firms--Petróleos de Venezuela 
S.A., China Oil, Unipec, and Zhuhai Zhenrong--were reported to have 
sold refined petroleum products to Iran between July 1, 2010, and 
December 31, 2011. Of the four firms, Petróleos de Venezuela S.A. was 
not identified in our 2010 report. According to open sources, the 
number of firms selling refined petroleum products to Iran has 
decreased since the release of our 2010 report. Eleven of the 16 firms 
that we listed in our 2010 report were reported in open sources and/or 
indicated in letters to us that they had stopped sales of refined 
petroleum products to Iran, and we did not find any open sources that 
reported the firms having sold refined petroleum products to Iran 
since June 30, 2010. For two firms that our 2010 report listed as 
having been reported to have sold refined petroleum products to Iran--
Emirates National Oil Company and Hin Leong Trading Corporation--we 
did not find sufficient open source information that reported whether 
the firms had continued or ceased sales of refined petroleum products 
to Iran since June 30, 2010. According to DOE and open source reports, 
as well as a State official, sanctions have made it difficult for Iran 
to import gasoline as many suppliers of refined petroleum products 
stopped shipments after the passage of CISADA. According to DOE and 
State officials, Iran has attempted to increase its ability to refine 
its own gasoline and to reduce domestic demand. 

The U.S. government did not have contracts with the three Chinese 
firms or Petróleos de Venezuela S.A., which were reported in open 
sources to have sold Iran refined petroleum products between July 1, 
2010, and December 31, 2011. 

Background: 

The United States enacted legislation that allows for the imposition 
of sanctions on activities with Iran's nuclear, missile, energy, and 
financial sectors, including activities related to Iran's nuclear and 
conventional weapons technology and activities that involve human 
rights violations.[Footnote 8] U.S. law has restricted U.S. and 
foreign firms from engaging in activities through a variety of 
sanctions since 1987. According to State, these measures are designed 
to: 

(1) block the transfer of weapons, components, technology, and dual-
use items to Iran's prohibited nuclear and missile programs; 

(2) target selected sectors of the Iranian economy relevant to its 
proliferation activities; and: 

(3) induce Iran to engage constructively, through discussions with the 
United States and other countries, to return to compliance with its 
nonproliferation obligations. 

CISADA was enacted on July 1, 2010, adding additional requirements and 
measures to the Iran Sanctions Act of 1996 (ISA).[Footnote 9] ISA, as 
amended by CISADA, provides for sanctions to be imposed against firms 
that are determined to knowingly sell or provide Iran with refined 
petroleum products that (1) have a fair market value of $1 million or 
more, or (2) during a 12-month period, have an aggregate fair market 
value of $5 million or more.[Footnote 10] For any person determined to 
have engaged in a sanctionable activity after July 1, 2010, the 
President can impose three or more of a possible nine sanctions, 
including prohibiting the foreign firm from engaging in U.S. 
government procurement. The President, who delegated certain 
authorities under the act to the Secretary of State, may waive the 
imposition of sanctions for these activities.[Footnote 11] State is 
the agency primarily responsible for implementing the provisions of 
ISA and the amendments by CISADA. 

Four Foreign Firms Sold Refined Petroleum Products to Iran from July 
1, 2010 to December 31, 2011, According to Open Sources: 

Open Sources Reported Four Foreign Firms That Sold Refined Petroleum 
Products to Iran: 

Based on open sources, we identified four foreign firms that reported 
sales of refined petroleum products to Iran from July 1, 2010, through 
December 31, 2011. Three Chinese firms--China Oil, Unipec, and Zhuhai 
Zhenrong--and Petróleos de Venezuela S.A. were reported, in open 
sources, to have sold refined petroleum products to Iran during this 
period. Of the four firms reported to have sold refined petroleum 
products to Iran after June 30, 2010, only Petróleos de Venezuela S.A. 
was not identified in our 2010 report. A September 2010 report in EI 
Finance stated that the number of gasoline cargoes to Iran declined 
after the passage of CISADA, leaving Iran heavily reliant on Chinese 
traders to provide it with gasoline. In our September 2010 report, we 
identified 16 firms that open sources reported had sold refined 
petroleum products to Iran from January 1, 2009, through June 30, 
2010. However, 11 of these firms were reported in open sources and/or 
indicated in letters to us that they had stopped sales of refined 
petroleum products to Iran, and we did not find any open source 
information indicating that these firms had resumed selling refined 
petroleum products to Iran after June 30, 2010. For two firms that 
were reported as having sold refined petroleum products to Iran in our 
2010 report--Emirates National Oil Company and Hin Leong Trading--we 
did not find sufficient open source information that reported whether 
or not the firms sold refined petroleum products to Iran after June 
30, 2010, and the firms did not respond to our requests to comment on 
activity with Iran after June 30, 2010. The firms we identified in our 
September 2010 report and this 2011 update are listed in table 1. We 
did not attempt to determine whether the reported sales of refined 
petroleum products to Iran met the legal criteria for sanctionable 
activities under ISA. The Secretary of State is responsible for making 
such determinations. 

Table 1: Comparison of Foreign Firms Reported in Open Sources to Have 
Sold Refined Petroleum Products to Iran during the Periods of January 
2009 through June 2010 and July 2010 through December 2011: 

Firm: China Oil; 
Country[A]: China; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2010; 
Summary of reported sales - July 2010 to December 2011: Sold gasoline 
to Iran in 2010 and 2011. No comment on our findings as of December 
31, 2011. 

Firm: Unipec; 
Country[A]: China; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2010; 
Summary of reported sales - July 2010 to December 2011: Sold gasoline 
to Iran in 2010 and 2011. No comment on our findings as of December 
31, 2011. 

Firm: Zhuhai Zhenrong; 
Country[A]: China; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2010; 
Summary of reported sales - July 2010 to December 2011: Sold gasoline 
to Iran in 2010 and 2011. No comment on our findings as of December 
31, 2011. 

Firm: Petróleos de Venezuela S.A; 
Country[A]: Venezuela; 
Summary of reported sales - January 2009 to June 2010: No reported 
sales; 
Summary of reported sales - July 2010 to December 2011: Sold petroleum 
products to Iran in 2011. No comment on our findings as of December 
31, 2011. 

Firm: Emirates National Oil Company; 
Country[A]: United Arab Emirates; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales and no reports that the firm stopped sales. No comment on our 
findings as of December 31, 2011. 

Firm: Hin Leong Trading; 
Country[A]: Singapore; 
Summary of reported sales - January 2009 to June 2010: Traded refined 
petroleum products to Iran in 2009; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales and no reports that the firm stopped sales. No comment on our 
findings as of December 31, 2011. 

Firm: British Petroleum; 
Country[A]: United Kingdom; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2008, but stopped in 2009; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2009. 

Firm: Glencore; 
Country[A]: Switzerland; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009, but stopped in 2009; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2009. 

Firm: Independent Petroleum Group (IPG); 
Country[A]: Kuwait; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Lukoil (Litasco); 
Country[A]: Russia (Switzerland); 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Petronas; 
Country[A]: Malaysia; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Reliance Industries; 
Country[A]: India; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009, but stopped in 2009; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2009. 

Firm: Royal Dutch Shell; 
Country[A]: the Netherlands; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009, but stopped in 2009; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2009. 

Firm: Total; 
Country[A]: France; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Trafigura; 
Country[A]: Switzerland; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Tupras; 
Country[A]: Turkey; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Firm: Vitol; 
Country[A]: Switzerland; 
Summary of reported sales - January 2009 to June 2010: Sold gasoline 
to Iran in 2009 and 2010, but stopped in 2010; 
Summary of reported sales - July 2010 to December 2011: No reported 
sales. Stopped sales in 2010. 

Source: GAO analysis of open source information. 

[A] The country listed in this column is the physical location of the 
firm as reported in open sources. 

[End of table] 

According to Open Sources, Sales of Refined Petroleum Products to Iran 
Have Decreased: 

Based on open sources, since the enactment of CISADA in July 2010, 
sales of refined petroleum products to Iran have decreased. According 
to DOE, Iran imported approximately 130,000 barrels of gasoline per 
day in 2009. DOE reported that in 2010 Iran imported an estimated 
78,000 barrels per day, and Petroleum Intelligence Weekly reported in 
July 2011 that the imports had declined to an estimated 50,000 barrels 
per day. According to State and DOE officials, the reduction in the 
sales of refined petroleum products to Iran can be attributed to 
multiple causes, including (1) a decrease in the number of firms 
selling refined petroleum products to Iran, (2) increased Iranian 
refining capacity, and (3) a reduction in Iranian government gasoline 
subsidies provided to Iranian citizens, which aimed to lower domestic 
demand. 

According to a 2011 DOE report, Iran has a limited refinery capacity 
for the production of fuel and consequently imports a sizable share of 
its gasoline supply. According to DOE, the sanctions imposed on Iran 
have made it difficult for Iran to import the needed volumes of 
gasoline to meet demand, as the number of firms that are reported to 
have sold refined petroleum products to Iran has decreased. 

In addition, Iran is expanding its refining capacity to meet domestic 
demand and reduce reliance on foreign refined petroleum products. For 
example, according to an open source, Iran has expanded its Shazand 
refinery, which quadrupled gasoline production capacity to 100,000 
barrels per day. Increased refinery output will eventually lead to a 
further reduction in Iran's purchase of gasoline from foreign firms, 
and DOE reported that if proposed expansions occur as planned, Iran 
could export gasoline in 2015. Furthermore, DOE, an Institute for 
Defense Analyses briefing, and open source reports indicated that, in 
order to compensate for the reduction of shipments of refined 
petroleum: 

products, Iran has been producing gasoline at petrochemicals 
facilities.[Footnote 12] According to these sources, gasoline produced 
in this way is of poor quality and reduces the output of 
petrochemicals that would have been produced in these facilities 
otherwise. 

Finally, according to DOE and International Monetary Fund reports, 
Iran has also reduced the amount of gasoline subsidies for citizens in 
an effort to reduce domestic demand for gasoline and further limit the 
impact of reduced imports of refined petroleum products. The 
government of Iran subsidizes petroleum sales in-country, but on 
December 19, 2010, it announced a reduction in the subsidy of gasoline 
for Iranian citizens, increasing the cost of gasoline from 
approximately $0.10 per liter to $0.40 per liter for up to 60 liters 
of gasoline per month, according to open source reports. According to 
an International Monetary Fund report, gasoline consumption in Iran 
declined as a result of the change. 

The Secretary of State Imposed Sanctions on Eleven Foreign Firms for 
Providing Refined Petroleum Products to Iran: 

Since the enactment of CISADA in July 2010, the Secretary of State has 
imposed sanctions under ISA on 13 firms, including sanctions on 11 
firms for the sale of refined petroleum products or related goods and 
services to Iran.[Footnote 13] In September 2011, State imposed 
sanctions against Allvale Maritime Inc., Associated Shipbroking, 
Petrochemical Commercial Company International, Petróleos de Venezuela 
S.A., Royal Oyster Group, Société Anonyme Monégasque D'Administration 
Maritime Et Aérienne, Speedy Ship, and Tanker Pacific Management Pte. 
Ltd.[Footnote 14] On January 12, 2012, State imposed sanctions on 
Zhuhai Zhenrong, FAL Oil Company Limited (United Arab Emirates), and 
Kuo Oil (S) Pte. Ltd. (Singapore) for conducting business with Iran's 
energy sector. According to State, the firms were sanctioned for the 
following reasons: 

* Petrochemical Commercial Company International, Royal Oyster Group, 
and Speedy Ship were among the largest current suppliers of refined 
petroleum products to Iran and all three regularly engaged in 
deceptive practices in order to ship these products to Iran and evade 
U.S. sanctions. 

* Allvale Maritime Inc., Associated Shipbroking, Société Anonyme 
Monégasque D'Administration Maritime Et Aérienne, and Tanker Pacific 
Management were sanctioned for their roles in a September 2010 
transaction that provided a tanker valued at $8.65 million to the 
Islamic Republic of Iran Shipping Lines, an entity that has been 
determined to have supported Iran's nuclear and missile programs. 

* Petróleos de Venezuela S.A., the state-owned oil company of 
Venezuela, delivered at least two cargoes of reformate, a blending 
component that improves the quality of gasoline, to Iran between 
December 2010, and March 2011, worth approximately $50 million. 

* Zuhai Zhenrong is the largest supplier of refined petroleum products 
to Iran, and brokered the delivery of over $500 million in gasoline to 
Iran between July 2010, and January 2011. 

* FAL Oil Company Limited, a large independent energy trader based in 
the UAE provided over $70 million in refined petroleum to Iran over 
multiple shipments in late 2010. 

* Kuo Oil (S) Pte. Ltd., an energy trading company, provided over $25 
million in refined petroleum to Iran between late 2010, and early 2011. 

To identify firms that sell refined petroleum products to Iran, a 
State official indicated that State collects and reviews information 
from numerous sources, including open source information, but relies 
on information from numerous intelligence organizations including 
State's Bureau of Intelligence and Research, the Office of the 
Director of National Intelligence, the Central Intelligence Agency, 
and the Office of Naval Intelligence. According to a State official, 
companies are going to great lengths to hide the sales of refined 
petroleum products to Iran. According to a State official, 
intelligence information gathered by the U.S. government led to the 
determination to impose sanctions on all but one of the firms. 
[Footnote 15] 

In a related report, we described State's process for enforcing energy-
related sanctions under ISA, including those for the sale of refined 
petroleum products to Iran.[Footnote 16] 

None of the Four Firms Had Contracts with the U.S. Government: 

From July 1, 2010, to December 31, 2011, the U.S. government did not 
have any contracts with the four firms that were reported in open 
sources to have sold refined petroleum products to Iran during that 
period. As noted in our 2010 report, the U.S. government obligated 
funds to three firms that were reported to have sold refined petroleum 
products to Iran, but open sources did not report that these firms 
sold such products to Iran after the enactment of CISADA in July 2010. 

Agency Comments: 

We provided the Departments of State, Energy, and Defense with a draft 
of this report for review and comment. The Department of State 
provided technical comments, which we incorporated into the report as 
appropriate. The Departments of Defense and Energy did not comment on 
the report. 

In addition, we provided the firms listed in this report as having 
sold refined petroleum products to Iran between July 1, 2010, and 
December 31, 2011, an opportunity to comment on the open source 
information about their activities. As of December 31, 2011, we had 
not received any responses from firms that were reported to have sold 
Iran refined petroleum products or the firms that did not have 
sufficient information on whether they sold or stopped selling refined 
petroleum products to Iran after June 30, 2010. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 7 days 
from the report date. At that time, we will send copies to appropriate 
congressional committees, the Secretary of State, Secretary of Energy, 
and Secretary of Defense. In addition, the report will be available at 
no charge on GAO's website at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-9601 or melitot@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in enclosure II. 

Signed by: 

Thomas Melito: 
Director, International Affairs and Trade: 

Enclosures - 2: 

[End of section] 

Enclosure I: Scope and Methodology: 

To identify firms reported in open sources to have sold refined 
petroleum products to Iran at any time during the period between July 
1, 2010, and December 31, 2011, we searched open source information 
that was determined to be credible and comprehensive by an information 
specialist on our staff, who has conducted work on the energy sector 
and worked for firms that conduct audits in the oil processing 
industry, such as refining and petrochemical production. For the 
purposes of our search, we defined refined petroleum products to 
include gasoline, kerosene, diesel fuel, and gas oil. To generate our 
list of firms that provided refined petroleum products to Iran, we 
reviewed open sources published between July 1, 2010, and December 31, 
2011. Open source information is overt and publicly available 
information, as opposed to covert or classified. 

We searched industry trade publications for reports of firms selling 
refined petroleum products to Iran at any time during the period 
between July 1, 2010, and December 31, 2011. Our information 
specialist used the Nexis Oil and Energy databases, which contain 
trade publications where more than 60 percent of the stories pertain 
to the oil and energy industries. Publications include Oil Daily, Oil 
and Gas News, Oil and Gas Journal, and Platt's Oilgram News, among 
others. The information specialist then screened the publications and 
excluded sources deemed insufficiently reliable, such as newspaper 
reports, newswires, and direct news releases from the Iranian 
government. We reviewed the open sources for specific firms named in 
U.S. government reports from the Department of State (State) and the 
Department of Energy (DOE) as sellers of refined petroleum products to 
Iran. We also reviewed company publications, annual reports, 
Securities and Exchange Commission filings, and press releases and 
corporate statements reporting the sale of refined petroleum products 
to Iran or for corrected information that had been publicly reported. 
In addition, we reviewed government reports from the Congressional 
Research Service, as well as other reports from international and 
industry organizations, such as the International Atomic Energy Agency 
and IHS Global Insight. 

After identifying firms in open sources, we confirmed that the reports 
of the sales of refined petroleum products to Iran were reliable if 
one of the following criteria had been met: (1) at least three 
standard industry publications cited the firm as having sold refined 
petroleum products to Iran at any time during the period between July 
1, 2010, and December 31, 2011, (2) the firm provided information on 
its corporate website about its sale of refined petroleum products to 
Iran at any time during this period, and at least one standard 
industry publication corroborated the firm's reported sale of refined 
petroleum products to Iran at any time during this period, or (3) the 
firm provided information in a corporate report, a Securities and 
Exchange Commission filing, or confirmed in a letter to us that the 
firm sold refined petroleum products to Iran during this period. If 
none of these criteria were met, the firm was not included in our 
tables. We did not review the contracts or documents underlying these 
transactions reported in open sources and did not independently verify 
these transactions. We reviewed open source information to identify 
the details of the reported sale of refined petroleum products to 
Iran. In cases where dates of activity were not specified in the 
reports, we used the date of publication for the date of activity. We 
did not attempt to determine whether the reported sales of refined 
petroleum products to Iran met the legal criteria for sanctionable 
activities under the Iran Sanctions Act, as amended by the 
Comprehensive Sanctions Accountability and Divestment Act. The 
Secretary of State is responsible for making such determinations. We 
also applied the same methodology to determine whether to list a firm 
that was reported to have stopped selling refined petroleum products 
to Iran during the same period. We determined to list firms that were 
reported to have stopped sales if three separate open sources reported 
and/or the firm provided information to GAO that it had stopped sales 
of refined petroleum products to Iran. We also reviewed open sources 
to confirm that no new reports of refined petroleum product sales by 
these companies had resumed after June 30, 2010. 

We interviewed officials from State and DOE regarding the Iranian 
energy sector and sales of refined petroleum products to Iran. We also 
met with intelligence agency officials to discuss sales of refined 
petroleum products to Iran and Iran's energy sector, but we did not 
present any classified information in this report. 

After identifying the firms that were reported to have sold refined 
petroleum products to Iran, we attempted to contact the firms by 
telephone to explain the purpose of our report and obtain an 
appropriate point of contact within the firm to officially comment on 
the information reported in open sources. We then e-mailed the firms a 
letter containing information from table 1 concerning the firms' 
reported sales to Iran. As of December 31, 2011, none of the firms had 
responded. 

To determine whether the four firms identified in open sources as 
having sold refined petroleum products to Iran also had contracts with 
the U.S. government from July 1, 2010, through December 31, 2011, we 
searched the Federal Procurement Data System-Next Generation (FPDS-NG) 
for references to these firms. We chose FPDS-NG to determine whether 
any of these firms also had contracts with the U.S. government because 
FPDS-NG has served as the primary governmentwide contracting database 
since 1978. Congress, executive branch agencies, and the public rely 
on FPDS-NG for a broad range of data on agency contracting actions, 
procurement, and spending. The Office of Management and Budget 
established FPDS-NG, and the General Services Administration 
administers the system. More than 60 government departments, agencies, 
and other entities submit contract data to FPDS-NG. 

We searched the FPDS-NG archives from July 1, 2010, through December 
31, 2011 using search terms that would select any record with the 
names of firms that were reported to have sold refined petroleum 
products to Iran, as identified in table 1. Our searches for U.S. 
contracts only covered firms that we had identified in open sources as 
having sold or shipped refined petroleum products to Iran. 

We conducted our work from September 2011 to January 2012 in 
accordance with all sections of GAO's Quality Assurance Framework that 
are relevant to our objectives. The framework requires that we plan 
and perform the engagement to obtain sufficient and appropriate 
evidence to meet our stated objective and discuss any limitations in 
our work. We believe that the information and data obtained, and the 
analysis conducted, provide a reasonable basis for any findings and 
conclusions. 

[End of section] 

Enclosure II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Thomas Melito, (202) 512-9601 or melitot@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Tetsuo Miyabara (Assistant 
Director), John F. Miller, Joanna Berry, Grace Lui, Julia Kennon, 
Debbie Chung, and Dave Hancock made key contributions to this report. 

[End of section] 

Footnotes: 

[1] For example, the Comprehensive Iran Sanctions, Accountability, and 
Divestment Act of 2010, Pub. L. No. 111-195, 124 Stat. 1312 and 
Council Decision 2010/413/CFSP Concerning Restrictive Measures Against 
Iran and Repealing Common Position 2007/140/CFSP, 2010 O.J. (L 195) 39. 

[2] The International Atomic Energy Agency reported in November 2011 
on concerns regarding the possible military dimensions to Iran's 
nuclear program. International Atomic Energy Agency, Implementation of 
the NPT Safeguards Agreement and relevant provisions of Security 
Council resolutions in the Islamic Republic of Iran, GOV/2011/65. 
(Vienna, Austria: November 8, 2011). 

[3] International Emergency Economic Powers Act, Pub. L. No. 95-223, 
91 Stat. 1625 (1977); National Emergencies Act, Pub. L. No. 94-412, 90 
Stat. 1255 (1976), and 3 U.S.C. § 301 as implemented by Executive 
Order 12957, 60 Fed. Reg. 14615 (Mar. 15, 1995) (prohibiting U.S. 
involvement with petroleum development in Iran), Executive Order 
12959, 60 Fed. Reg. 24757 (May 6, 1995) (banning specified exports and 
investment), and Executive Order 13059, 62 Fed. Reg. 44531 (Aug. 19, 
1997) (prohibiting virtually all trade and investment activities with 
Iran by U.S. persons, wherever located). Iran and Libya Sanctions Act 
of 1996, Pub. L. No. 104-172, 110 Stat. 1541, as amended. 

[4] Pub. L. No. 111-195. 

[5] Pub. L. No. 104-172, § 5, as amended. 

[6] GAO, Firms Reported in Open Sources to Have Sold Iran Refined 
Petroleum Products between January 1, 2009, and June 30, 2010, GAO-10-
967R (Washington, D.C.: Sept. 3, 2010). 

[7] GAO, Actions to Enforce the Iran Sanctions Act and Implement 
Contractor Certification Requirement, [hyperlink, 
http://www.gao.gov/products/GAO-12-316R] (Washington, D.C.: Jan. 24, 
2012). 

[8] Pub. L. No. 111-195. 

[9] Id. 

[10] Pub. L. 104-172 § 5(a), as amended. 

[11] Memorandum: Delegation of Certain Functions and Authorities under 
the Comprehensive Iran Sanctions, Accountability, and Divestment Act 
of 2010, 75 Fed. Reg. 67025 (Sept. 23, 2010). 

[12] Jessica L. Knight, Dr. Robert A. Zirkle, and Dr. Richard H. 
White, Institute for Defense Analyses. Iran's Petrochemical Plants: An 
Open Source Primer, annotated briefing prepared for United States 
Central Command (Alexandria, Va: Mar. 22, 2011). The Institute for 
Defense Analyses annotated briefing is an unclassified, open source 
review of Iran's petrochemical plants, and includes findings and 
conclusions regarding the production, development, and expansion of 
Iran's petrochemical industry. 

[13] In addition to the sanctions imposed on eleven firms for the sale 
of refined petroleum products or related goods and services to Iran, 
on October 13, 2010, and April 5, 2011, the Secretary of State imposed 
sanctions on two firms, Belarusneft (Belarus) and NaftIran Intertrade 
Company (Switzerland) for their investment in Iran's oil, gas, and 
petrochemical sectors. 75 Fed. Reg. 62916-02 (Oct. 13, 2010) (imposing 
sanctions on Naftiran Intertrade Company) and 76 Fed. Reg. 18821-04 
(Apr. 5, 2011) (imposing sanctions on Belarusneft). 

[14] See Public Notice 7585, 76 Fed. Reg. 56866 (Sept. 14, 2011) 
(imposing sanctions on Allvale Maritime Inc., Associated Shipbroking, 
Petrochemical Commercial Company International, Petróleos de Venezuela 
S.A., Royal Oyster Group, Société Anonyme Monégasque D'Administration 
Maritime Et Aérienne, Speedy Ship, and Tanker Pacific Management 
(Singapore) Pte. Ltd.). 

[15] We searched open sources for information on the eleven firms on 
which State imposed sanctions for the sale of refined petroleum 
products or related goods and services to Iran. We identified reports 
in at least three credible and reliable open sources that Petróleos de 
Venezuela S.A. and Zuhai Zhenrong had sold refined petroleum products 
to Iran between July 1, 2010, and December 31, 2011. We did not find 
sufficient information in at least three credible and reliable open 
sources that reported that the remaining nine firms had sold or 
transported refined petroleum products to Iran during that time period. 

[15] [hyperlink, http://www.gao.gov/products/GAO-12-316R]. 

[End of section] 

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