US warns France over Iran trade mission

America warned France yesterday (Wednesday) that allowing more than 100 business leaders to visit Iran on a trade mission risked undermining sanctions by giving the impression that Tehran was "open for business".

The 116-strong French delegation - with representatives from companies including Peugeot, Renault, Total and Airbus - was the largest of its kind from Europe since Iran signed an interim agreement limiting its nuclear programme last November. In return, America eased sanctions in what the Obama administration insisted was a "limited and reversible" way, despite warnings from Israel and some US congressmen that any relaxation of sanctions would cause the embargo on Iran to crumble.

The US fears that France, by sending a trade delegation to Iran so quickly, might be vindicating that criticism. John Kerry, the US secretary of state, told Laurent Fabius, his French counterpart, that the timing of the mission was "not helpful".

The French foreign ministry insisted that Medef, France's business organisation, had organised the visit to Iran on its own initiative "in an exploratory capacity and in compliance with France's international engagements".

Pierre Gattaz, the head of Medef, said the delegation had not violated the limited sanctions relief offered by the nuclear agreement signed in Geneva.

But French business leaders were "summoned" to the US embassy in Paris to receive a warning about the partial nature of the relaxation of sanctions. According to Le Canard Enchaine, an investigative weekly, Peter Harrell, a US deputy assistant secretary, emphasised that Iranian banks were still embargoed.

(Henry Samuel in Paris and David Blair in London)