updated 2/2/2005 9:25:57 PM ET 2005-02-03T02:25:57

General Electric Co., which has been accused of collecting "blood money" by doing business in Iran, will stop accepting any new orders for business in the country, company officials said Wednesday.

The move by the world's largest company by market value comes just days after another conglomerate, Halliburton Co., announced the company will wind down its operations in Iran.

"We're seeing a turnaround by a number of U.S. companies operating in Iran," said Dan Katz, chief counsel to U.S. Sen. Frank Lautenberg, D-N.J.

Katz said the moves may signal an imminent change in U.S. policy that has allowed foreign subsidiaries of American companies to do business in Iran.

Last year, Lautenberg accused GE and other American companies of collecting "blood money" by doing business with countries the United States says sponsors terrorism and said he would push for legislation to stop it. New York City comptroller William Thompson, as manager of employee pension funds, has also pressured GE and other companies.

Under current law, U.S. firms are not allowed to do business with nations deemed by the United States to sponsor terrorism. But the law does not specifically bar foreign subsidiaries from such business.

"Our business activities in Iran are fully compliant with U.S. law," said Gary Sheffer, a GE spokesman.

Lautenberg said the companies should not have been operating in Iran.

"When American companies do business with Iran they are helping the Iranians create revenue that is funneled to terrorists," Lautenberg said.

GE said it decided on the moratorium in December. The decision, which became effective Tuesday, comes amid tensions and threats of sanctions over Iran's nuclear program.

"Because of uncertain conditions related to Iran, including concerns about meeting future customer commitments, we will not accept any new orders for business in Iran effective Feb. 1," Sheffer said. "This moratorium on new orders will be re-evaluated as conditions relating to Iran change."

Trouble spot
President Bush said last month he hoped the situation could be solved diplomatically, but he would not rule out using military force against Iran over its nuclear program, which the United States believes is aimed at producing weapons. Vice President Dick Cheney has said Iran "is right at the top of the list" of world trouble spots.

Iran has denied allegations of a secret nuclear weapons programs, saying its nuclear activities are for peaceful energy purposes.

Under international pressure, Iran suspended uranium enrichment and all related activities in November, hoping to avoid U.N. Security Council sanctions. The nation has said it will decide within three months whether to continue its suspension, which is monitored by U.N. nuclear inspectors.

GE did about $270 million in business last year in Iran, representing less than 1 percent of its revenue, Sheffer said. Through a foreign subsidiary, GE has provided hydroelectric equipment, medical equipment, and oil and gas equipment in Iran.

None of the business involves the sale of nuclear products, Sheffer said. He said it would take about a year for GE to complete its existing contracts.

Lautenberg has said he would offer a measure that would bar any firm controlled over 50 percent by an American parent company from doing business with terror states.

Singled out
Lautenberg and Thompson singled out three companies — Halliburton Co., ConocoPhillips, and GE — for exploiting what they said was a loophole in the law.

The government has identified Iran, Syria, Libya, Cuba, Sudan and North Korea as sponsors of terrorism. Libya is working to have its sanctions dropped.

ConocoPhillips, the nation's third-largest oil company, has already promised to pull out of Syria once a contract expires next year.

Thompson, a Democrat who manages $80 billion of New York pension money, including funds for firefighters and police officers, has said if Congress does move to end companies' business with terror sponsors, other pension managers around the country are considering joining his effort.

Congress has ordered the Security and Exchange Commission to identify all U.S. public companies operating in countries the government says sponsor terrorism and ensure that information is disclosed to stockholders.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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