Anti-Iran Lobby Hits GM-Peugeot Deal

Group questions whether GM's new investment in Peugeot violates U.S. sanctions on Iran.

An influential U.S. anti-Iran lobby group on March 28 called for newly tied General Motors Co. (IW 500/5) and Peugeot (IW 1000/43) to shut down Peugeot's Iran business due to Tehran's suspect nuclear program.

The United Against Nuclear Iran group said GM's new investment in PSA Peugeot Citroen should be investigated to see if it violates U.S. sanctions on Iran, because of Peugeot's strong market position in the country.

"As a working partner and now official stake-owner of Peugeot, GM owes it to its investors and customers to compel Peugeot into ending its business in Iran," said UANI head Mark Wallace, a former U.S. ambassador to the United Nations. "By doing business directly with the Iranian regime, Peugeot supports the regime's ability to develop its illegal nuclear weapons program, support terrorist proxies and repress the Iranian people."

He called for a congressional investigation of the auto deal.

But GM spokesman Greg Martin said Peugeot had already halted its dealings with Iran.

The French company decided to suspend production and shipment of material into Iran "some time ago -- before we entered into our alliance with them in fact," he told AFP.

"Our agreement with them is fully compliant with U.S. law governing trade with Iran, and is not intended to benefit Iran in any way," he said.

On Tuesday, the two automakers announced that GM had acquired a 7% shareholding in PSA, Europe's number two carmaker, as both sought to rationalize market and production operations.

UANI called Peugeot the leading foreign auto supplier in Tehran, and said its main local partner, the Iran Khodro Group or IKCO, "is controlled by the Iranian regime, and affiliated with Iran's Islamic Revolutionary Guard Corps."

The Revolutionary Guards especially have been targeted under U.S. sanctions set by the White House and U.S. Treasury, which forbid any U.S. firm or person from doing business with them.

Wallace noted that the Treasury itself owns 32% of GM after the 2008 rescue of the top U.S. automaker.

"It is unacceptable for GM to financially align itself with a company that so openly deals with a regime that is responsible for the deaths of U.S. servicemen and threatens U.S. and global security," Wallace said. "The GM and Peugeot partnership may also run afoul of U.S. sanctions, and should be investigated by Congress."

While an unofficial, non-profit organization, UANI boasts strong links to official Washington. Besides Wallace, its co-founders and advisory board include former top U.S. diplomat Dennis Ross, ex-CIA chief James Woolsey and former White House homeland security adviser Frances Townsend.

The Treasury did not immediately respond to a request for comment.

Copyright Agence France-Presse, 2012

See also:

GM holds 7% of Peugeot After Share Issue

General Motors and Peugeot Are Close to a Deal, Sources Say

General Motors and Peugeot Discuss 'Strategic Partnership'



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