Last week we reported on increased jawboning by the State Department, which has been threatening to impose sanctions under the Iran Sanctions Act on foreign oil companies that do business in Iraq. One target singled out by State is the Austrian oil company OMV. In a daily press briefing, State Department spokesman Sean McCormack had this to say:

Well, we have talked to I think — the company is OMV. We’ve talked to the Austrian Government about these negotiations. I understand that OMV has recently signed a preliminary deal . . . [W]e would question why at this point given Iran’s behavior in the international community . . . [it] would want to encourage these sorts of business dealings with Iran at this . . . particular time.

It’s going to be a choice that each individual state, each individual business is going to have to make. We have also talked to them about the fact that there are potentially applicable U.S. laws that could be triggered under the Iran Sanctions Act for basically over a certain dollar amount for investment in the Iranian oil and gas sector there’s a possibility of looking at applying sanctions to the relevant companies. I’m not saying we’re at that point, by any means, but it is something about which countries around the world, businesses around the world need to be aware of.

Thomas Huemer, a spokesman for OMV, was quick to respond:

OMV spokesman Thomas Huemer said that the company would respect all Austrian, EU and relevant international laws in its dealings with Iran’s National Iranian Oil Company (NIOC).

Hmm, I don’t see U.S. law or the Iranian Sanctions Act included in that list.

Of course, to be fair to OMV, it is in a difficult position. E.U. Council Regulation No 2271/96 explicitly forbids E.U. companies like OMV from complying with the Iran Sanctions Act. And McCormack’s threats were, after all, only of the “we’re only just saying” variety.

In other news, the Bureau of Industry and Security (“BIS”) wins the double plus good Newspeak award for headlining it’s announcement of new, and widely criticized, export controls on China with this headline: “Enhancing U.S. China Technology Trade.”

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