Leaked 2009 memo to then CEO Sir John Rose shows state-owned firms bought nearly 100 turbines between 1975 and 1995. Rolls-Royce sold equipment to Iran for decades, a confidential company memo reveals, exploiting a series of loopholes in US sanctions to avoid breaking the law.
The Iranian government amassed the world’s largest collection of the British engineering group’s signature turbine and booked millions of pounds of orders each year, according to a briefing drafted in 2009 for the company’s then chief executive, Sir John Rose.
Trading in Iran appears to have carried on despite the enormous political risk of being seen to avoid US sanctions.
A quarter of Rolls-Royce’s entire £14bn revenue is generated in the US, with much of that reliant on military contracts. The company signed orders worth $224m (£181m) from the Department of Defense in the first half of 2015 alone.
The company appears never to have issued a statement on its decades-long Iranian operation. The only mentions of Iran on Rolls-Royce’s website date from after the softening of US sanctions earlier this year.
Zafar Khan, an aerospace and defence analyst at Société Générale, said he had never heard of Rolls-Royce trading with Iran. “I am little bit surprised, given that it’s under sanction and these guys have a pretty big exposure to the US both on the commercial [aerospace] side as well as defence,” he said.
Relations between Iran and the west deteriorated dramatically throughout the 2000s amid concerns the country was trying to develop a nuclear weapons programme, with the UN security council approving fresh sanctions on Iran in 2006.
US sanctions were first imposed after the Iranian revolution in 1979. In 1995, the then US president, Bill Clinton, signed into law tough measures specifically banning companies from dealing with Iran’s energy sector.