Sony Reports Equipment Sales to Iran, Possible Breach of Sanctions

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The company believes its actions were permissible, but says the impact of possible penalities "could be material."

TOKYO – Sony has reported in a company filing to U.S. authorities that it sold $13 million worth of medical, office and video equipment through an intermediary to Iran -- transactions that are declarable under the conditions of international sanctions against Tehran.

The equipment, which passed through a dealer in Dubai, requires reporting according to the Iran Threat Reduction and Syria Human Rights Act of 2012.

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A spokesperson from Sony's Tokyo headquarters told The Hollywood Reporter that the company was not commenting on the sales beyond what had been filed with U.S. authorities.

Sony, which reported a profit of $500,000 on the transactions, said that one of the dealers was linked to the Islamic Republic of Iran Broadcasting, Tehran's state broadcaster.

The Japanese conglomerate also maintains a small representative office in the Iranian capital, which it said in the filing “may engage in certain incidental transactions (for example, permits, utilities, and other similar matters incidental to operating an office in Iran) with Iranian government-owned entities. No material revenues or profits are associated with these transactions with the Iranian government.”

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The company said it does not believe it breached the terms of sanctions, but did allow for the possibility. 

"Sony believes that, and maintains policies and procedures designed to ensure that, its transactions with Iran and elsewhere have been conducted in accordance with applicable economic sanctions laws and regulations and do not involve transactions likely to result in the imposition of sanctions or other penalties on Sony," continued the statement. "However, there can be no assurance that Sony’s policies and procedures will be effective, and if the relevant authorities were to impose penalties or sanctions against Sony, the impact of such sanctions could be material."

Japan has maintained strong business ties with Iran for decades due to its reliance on Middle East oil, which it has required more of since shutting down its nuclear power plants after the 2011 accident at Fukushima. Japan has been negotiating with the U.S. over exemptions to sanctions on Iran to allow it to continue importing oil.

Twitter: @GavinJBlair