Swiss government rejects proposal to widen Iran oil reporting rules

GENEVA Fri Nov 16, 2012 6:14pm GMT

GENEVA (Reuters) - The Swiss cabinet has no plans to extend its reporting requirements on transactions with Iran to cover offshore branches of oil trading firms, it said, rejecting proposals from leftist parliamentarians.

A group of seven members of the Swiss Social Democrats Party raised the issue in September after Reuters revealed that the Bahraini branch of top Geneva-based oil trader Vitol was buying and selling Iranian fuel oil.

The company later confirmed the transaction and added that it had since stopped.

Switzerland opted not to replicate the European Union's embargo on Iranian oil, which took effect in July. The cabinet said the decision was motivated by foreign policy reasons, not commercial interests.

Swiss-based companies are allowed to continue trading Iranian oil but must report all transactions to the government, which is applying U.N. sanctions.

"Overseas subsidiaries of Swiss companies that are legally independent are not affected by sanctions in place in the host country," the cabinet said this week in a formal response to the parliamentarians.

It added that it had previously tried to extend the application of sanctions to foreign branches, but the measure did not receive enough support.

The Swiss decision to stay neutral on the oil embargo has resulted in pressure from Brussels and Washington to replicate their sanctions, which are designed to choke off the flow of petrodollars to Tehran.

The neutral country has also represented U.S. interests in Iran since after the 1979 revolution. It is one of the top centres for oil trading, and Geneva alone accounts for around a third of global volumes.

The Swiss cabinet also declined to release its list of oil transactions between Swiss companies and Iran, saying that this could make it difficult for the government to take future measures.

The Swiss State Secretariat for Economic Affairs in September rejected an earlier Reuters request for a copy of the list under the transparency law. Reuters is appealing the decision.

(Reporting by Emma Farge; editing by Stephanie Nebehay and Jane Baird)

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