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RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 OTTAWA 000100 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/IFD/ODF; EB/ESC/TFS; WHA/CAN 
PARIS ALSO FOR OECD 
COMMERCE FOR 6731 ELENZ 
 
E.O. 12958: DECL: 01/18/2017 
TAGS: CA EFIN IR MNUC PREL UNSC OECD
SUBJECT: CANADA:  NO EXPORT CREDITS FOR IRAN 
 
REF: A. STATE 4760 
     ¶B. 06 STATE 192099 
 
Classified By: EMIN BRIAN MOHLER.  EO 12958 Reasons 1.4 (b) and (d) 
 
¶1. (sbu) Summary:  Canada does not/not extend export credits 
or insurance to support trade with Iran, according to 
Canada's Department of Foreign Affairs.  Canada practices a 
restrictive, "controlled engagment" policy toward Iran that 
is limited to the murder case of Canadian-Iranian 
photojournalist Zahra Kazemi, human rights, and nuclear 
nonproliferation.  Canadian firms that export to Iran must 
obtain a permit, which is routinely denied if there is any 
possibility of "dual use."  Canadian exports to Iran totaled 
some U.S. $226 million in 2005 and U.S. $172 million in 2004. 
End Summary. 
 
¶2. (sbu) Ahead of Embassy's demarche on Trade and Finance 
Ministry officials regarding export credits to Iran (reftel), 
Econcouns discussed Canada's official trade relationship with 
Iran with Robert Publicover, Foreign Affairs 
Economic/Commercial Director for Iran, Iraq, Egypt, Syria, 
Lebannon and Jordan.  (Comment:  Trade Minister Emerson, 
Finance Minister Flaherty, and senior ministry officials are 
traveling in Asia and will return to Ottawa next week.  End 
Comment.) 
 
¶3. (c) Publicover stated that the Government of Canada does 
not/not extend export credits or insurance to support trade 
with Iran.  He also stated that there are no significant 
pending deals with Iran.  Publicover was unsure whether 
Canada had any "longstanding" sovereign or non-sovereign 
exposure to Iran, but said he would research the matter. 
 
¶4. (c) Publicover stated that Canada's political and 
commerical policies toward Iran are very restrictive and are 
based on then-Foreign Minister Pettigrew's May 2005 public 
statement following an Iranian court decision that exonerated 
the alleged murderers of Zahra Kazemi, a Canadian-Iranian 
photojournalist.  In his annoucement, Pettigrew stated the 
"bilateral relationship with Iran cannot proceed as normal," 
and that Canada would tighten its "controlled engagement" 
policy with Iran.  Publicover stated that Pettigrew had been 
"deeply upset" over the Kazemi case, and was ready to cut off 
diplomatic relations with Iran.  According to Pettigrew, 
however, Canadian Foreign Affairs officials successfully 
argued that this would leave Canada with no influence in 
Iran.  (Canada does not currently have an ambassador in 
Tehran, and Iran pulled its own ambassador out of Ottawa in 
2005.) 
 
¶5. (sbu) The main points of Canada's official policy toward 
Iran include: 
 
- Canada limits its encounters with Iranian officials to the 
Kazemi case, human rights in Iran, and nuclear 
non-proliferation. 
 
- Iranian officials are not permitted to enter Canada, and 
Canadian officials will not engage with Iran, except relating 
to the above issues. 
 
- Iranian Embassy officials in Ottawa must obtain Ministry of 
Foreign Affairs advance approval before meeting Government of 
Canada officials. 
 
- Canada will apply "strict export controls on sensitive 
goods" and advise Canadian businesses as to the political 
environment in Iran. 
Qenvironment in Iran. 
 
- Canadian government agencies will have no cooperation 
programs with the Iranian government. 
 
¶6. (c) Publicover emphasized the Government of Canada would 
not support businesses dealing with Iran, especially entities 
associated with the Iranian government.  He cited two cases 
involving a Canadian grain shipment and a Canadian oil 
 
OTTAWA 00000100  002 OF 002 
 
 
services company that were refused Canadian support because 
the companies were dealing with entities associated with the 
Iranian government.  Publicover stated that Canadian firms 
trading with Iran must obtain export permits, and that these 
permits are refused when the exported goods carry "any hint 
of dual use."  He also stated that Canada reminds firms that 
the Canadian and U.S. economies are highly integrated and 
that goods traded with Iran could contain significant U.S. 
content -- which in turn could run afoul of USG sanctions law 
that USG authorities enforce on an "extraterritorial basis." 
 
¶7. (u) Canada-Iran Trade 
 
Total Canada Exports to Iran 
Thousands of U.S. Dollars 
(2005 is latest available year) 
--------------------------------- 
 
2005        $226,347 
2004        $171,544 
2003        $167,764 
2002        $106,748 
 
Top Canadian Goods to Iran (2005) 
(Thousands of U.S. Dollars) 
--------------------------------- 
 
Barley      $40,122 
 
Soya Beans  $36,153 
 
Distilling 
Equipment   $25,673 
 
Total Iran Exports to Canada 
(Thousands of U.S. Dollars) 
---------------------------- 
 
2005        $36,706 
2004        $58,240 
2003        $45,123 
2002        $34,952 
 
Top Iranian Goods to Canada (2005) 
(Thousands of U.S. Dollars) 
---------------------------------- 
 
Grapes, 
Dried       $7,603 
 
Carpets, 
Knotted     $7,557 
 
Pistachios  $7,083 
 
(source: Statistics Canada) 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS