US charges baseless, say blacklisted Indian firms

TWO Indian firms blacklisted on August 4 by the US for allegedly supplying chemicals used to make weapons of mass destruction (WMDs) or long-range missiles to Iran, have refuted the claims and decided to present their defense to South Block next week.

The firms, blacklisted until July 2008 under Washington’s Iran-Syria Non-Proliferation Act last week, are Hyderabadbased Balaji Amines Ltd, a Rs 150-crore firm listed on the BSE, and a privately held Rs 30-crore Mumbai-based firm Prachi Poly Products Ltd.

Both have said the chemicals they exported to Iran have no use in the manufacture of weapons of any kind. Other agencies blacklisted with them are Russia’s Sukhoi and Rosoboronexport, and firms in Cuba and North Korea. Two other Indian firmsSandhya Organics and Sabero Organicswere blacklisted under similar charges by the US in December last year.

Under Iran-Syria Nonproliferation Act the administration is required to submit a report to the Congress every six months identifying foreign person and companies engaged in the WMD-proliferation activities. These companies have been blacklisted for allegedly violating Sections 2 and 3 of the Iran Non-Proliferation Act, State Department officials said.

As per the sanctions, numbers of measures have been put in place against the companies involved. No US department or agency may procure, or enter into any contract for the procurement of, any goods, technology, or services from these companies, the Federal notification said.

The ban against these two Indian companies, have given immediate tool in the hands of the anti-India lobby to campaign against the nuke deal.

Congressman, Edward Mrckey who has been opposing nuke deal for same reasons, said the Indian companies were black listed two days before the House voted on the bill. I am appalled that the Bush administration, which must have known for weeks if not months that it was going to sanction these two Indian companies, withheld this information from Congress until after the House voted to grant. This is a special exemption from the US nuclear nonproliferation law on India’s behalf, Markey said in a statement. Speaking to The Indian Express from Solapur, Maharashtra, Balaji Amines director Ram Reddy said, ‘‘We have followed all laid down procedures.

The items we exported to Iran are used in the manufacture of antibiotics, and we sell the same products to big pharma companies in India as well.’’

Reddy indicated that his firm was unofficially instructed by the External Affairs Ministry last year to stop exporting to Iran, after which the firm complied in December even though its insistence on an official written order from the government did not come through.

The firm had contracts with Iran’s Zakaria Tabriz Pharmaceutical and Chemical Company and Antibiotic Sazi Iran for the supply of triethyleamide, diethylyamide and diethyleacetamide, raw materials used to make antibiotics like ampicillin, amoxyciline and cephalaxin.

Reddy also indicated that his business would not be gravely impacted from loss of US businessRs 40-50 lakh only, compared to Rs 20 crore with Iranbut the potential commercial implications are serious, especially since Balaji Amines recently entered into a strategic arrangement with the world’s largest chemical manufacturer BASF.

The other blacklisted firm Prachi Poly Products Ltd says it made only one direct export to Iran in 2001 of phosphorus pentasulphide, a chemical used to manufacture lubricants and agrochemicals.

The company’s director Gaurang N. Parikh said, ‘‘There are so many firms which export, and all under guidelines. This chemical is not a Schedule I or III item and does not violate any Act. We are wondering why we have been singled out. Either way, we made the export five years ago, so why is it coming up now?’’