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Sept. 22 (Bloomberg) -- The U.K. won’t have to disclose the names of British companies that applied to sell goods with potential military uses to Iran, after winning a case in which it said banks are under U.S. pressure to drop them as clients.
A tribunal in London today ruled in favor of Britain’s Export Control Organization, which argued the disclosure of the companies may result in them losing access to banking services. The judgment was made in a Freedom of Information lawsuit filed by New York-based Bloomberg News, which plans to appeal.
“There is a significant public interest in protecting large and small firms, which trade lawfully and legitimately, from economic harm from a form of embargo imposed by banks, competitors, suppliers, clients and possibly foreign governments,” tribunal Judge David Farrer said in the ruling.
U.S. President Barack Obama signed a law almost a year ago broadening the scope of sanctions against Iran to stunt its nuclear-development program. Even before then, U.K. banks were cutting off customers with links to Iran to avoid being targeted by American authorities or losing permits to do business in the U.S., according to the export agency. The ECO issues licenses to ship supplies with dual military or civilian uses, as well as torture equipment and radioactive material, to other countries.
“The public must not be kept in the dark about how governments decide business licenses,” said Matthew Winkler, editor-in-chief of Bloomberg News. “We continue to object to secret evidence claiming that banks will withdraw funding for companies if the public knew who is doing business with whom.”
The lawsuit was filed following a 2009 Bloomberg News request that the U.K. Department for Business, Innovation and Skills, or BIS, which oversees the export agency, release the names of British businesses that applied to ship controlled goods to Iran in the first half of that year. BIS denied the request.
The government was supported in the case by evidence from the British-Iranian Chamber of Commerce, which said the U.S. was interfering with legal trade. In today’s judgment, Farrer said the possibility of U.S. meddling was “disturbing.”
“The tribunal felt some concern at the prospect of a U.K. company, trading quite lawfully in terms of U.K., EU and international law, suffering possibly fatal commercial damage through the extraterritorial intervention of our closest ally,” Farrer said.
The case tests transparency in the licensing process, the accountability of U.K. companies and the release of information in the public interest, Mark Stephens, Bloomberg News’s lawyer with Finers Stephens Innocent LLP, said last month.
The Bloomberg News request was part of an investigation into a series of Iranian air disasters that killed hundreds of people, including a February 2003 crash in which 276 died.
Bloomberg News sought to find out whether U.K. firms were denied licenses to legally sell civilian aircraft parts to the country. Iranian authorities blamed the crashes on U.S. sanctions blocking imports of aircraft parts.
The Information Commissioner’s Office, which oversees U.K. Freedom of Information disputes, initially backed a request from Bloomberg News to release the information. It later reversed the decision after the BIS filed secret third-party responses with the ICO. The Information Commissioner didn’t tell Bloomberg News or the public that it was considering the matter.
--Editors: Christopher Scinta, Anthony Aarons
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