Chemical giant Transammonia is ending all ties with Iran.
In a press release sent to Congressional leaders including Howard Berman, the Chairman of the US House Committee on Foreign Affairs, Joseph Lieberman, the Chairman of the Senate Committee on Homeland Security & Governmental Affairs, and Christopher Dodd, the Chairman of the Senate Banking Committee, Transammonia's Swiss subsidiary said it will not enter into new contracts with Iranian companies and wind down its business with Iran "as soon as possible."
The news came following a recent CNBC investigation revealing Transammonia's connection to the country. Although U.S. companies are prohibited by the Treasury Department from engaging in business transactions with Iran, CNBC reported last week that the Transammonia subsidiary—100% owned by Transammonia in the United States—purchases ammonia from Iran. (See video for CNBC's full investigation).
Ammonia is made from natural gas and Iran controls the world's second largest natural gas reserves. According to an economic plan released by the Iranian government, the country is trying to increase ammonia production by 60 percent in the next five years. Ammonia is used in crop production as well as household goods like Windex. It is also used for explosives, including roadside bombs in Afghanistan.
Transammonia also sent the release to Stuart Levey, the Under Secretary for Terrorism and Financial Intelligence. Levey oversees the process by which American companies receive licenses to operate in Iran. More than 300 companies received licenses to do so last year, most for humanitarian reasons.
Transammonia has never applied for a license and experts tell CNBC the company would not receive one given the importance of ammonia to Iranian economic growth plans. The prohibitions against doing business in Iran are part of the US strategy to economically pressure Iran into curbing its nuclear ambitions and its tacit support for terrorist activities.
Transammonia tells CNBC that its subsidiary's business was legal since US citizens didn't make decisions about the deals and because the subsidiary didn't send any money from Iran deals to the United States.
Separately, CNBC obtained a letter from Transammonia to United Against Nuclear Iran founder Ambassador Mark Wallace in which Transammonia denied allegations about doing business with banned entities. UANI is a non-partisan organization dedicated to preventing Iran from obtaining nuclear weapons.
In a letter to Transammonia Founder and CEO Ronald Stanton dated after CNBC's report, UANI said Transammonia is dealing with a company on the Treasury Department's list of Iranian firms with which American companies are forbidden to do business: the Iran Petrochemical Commercial Company (IPCC), a subsidiary of the National Petrochemical Company (NPC). Transammonia says neither IPCC or NPC own the production facility from which Transammonia's subsidiary purchased ammonia.
Instead, Transammonia says the facility is controlled by Razi Petrochemical Company, which is at least 83.59 percent owned by Turkish companies. Transammonia does acknowledge that IPCC acts as a marketer for Razi Petrochemical and collects a fee for that service.
Click here to see the full CNBC investigative report.