The Iranian company HEPCO lists Terex products under license on its company website. (HEPCO Website, “Under License”)
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According to its Annual Report filed with the SEC for fiscal year 2012: "Effective April 30, 2010, we adopted an internal policy prohibiting any transactions where Terex knows or has reason to believe that such equipment or parts would be destined for Iran unless for humanitarian purposes. This policy applies to both U.S. and non-U.S. subsidiaries and joint ventures controlled by Terex even if the transaction otherwise would be permissible under U.S. law. In the very limited circumstances where existing contractual obligations of non-U.S. subsidiaries and controlled joint ventures required the supply of equipment, parts or aftermarket service to entities in Iran, obligations under these contracts were to be completed as quickly as possible provided that the transactions were compliant with U.S. law (“Winding Down Transactions”). Subsequently on March 26, 2011, we revised our policy and eliminated the ability to engage in any Winding Down Transactions.
We acquired a majority interest in Demag Cranes AG on August 16, 2011, but did not obtain management control over Demag Cranes AG and its subsidiaries until April 18, 2012. Once we obtained management control, Demag Cranes AG and its subsidiaries subsequently adopted the Company’s internal policy on sales into Iran effective June 4, 2012. However, between January 1, 2012 and June 4, 2012, certain subsidiaries of Demag Cranes AG exported certain products into Iran.
Pursuant to Section 13(r) of the Securities Exchange Act of 1934, we are required to provide disclosure if, during 2012, we or any of our affiliates have engaged in transactions or dealings with the government of Iran that have not been specifically authorized by a U.S. federal department or agency.
During the year ended December 31, 2012 (and prior to the June 4, 2012 implementation of the Terex policy at Demag Cranes AG and its subsidiaries), Demag Cranes and Component GmbH (“DCC”), a German subsidiary of Demag Cranes AG, exported from Germany overhead crane components and spare parts to three entities in Iran, National Iranian Copper Industries Co. (“NICIC”), Hormozgan Steel Complex (“HSC”) and Farabi Industrial & Agricultural Co. (“FIA”), which, based on information available to us, we believe are or may be owned or controlled by the Government of Iran. All of the transactions occurred prior to the October 9, 2012 date of the Presidential Executive Order that made it a violation of U.S. law for owned or controlled foreign subsidiaries to knowingly engage in transactions with the Government of Iran or any person subject to the jurisdiction of the Government of Iran and prior to August 10, 2012, the date of enactment of the Iran Threat Reduction and Syria Human Rights Act of 2012.
The decision to provide the overhead crane components and spare parts was made and performed by a foreign entity and were permissible under applicable law when they were executed. The gross revenue values for DCC for the transactions with NICIC, HSC and FIA were €1,772, €5,932 and €18,174, respectively and the profit values for DCC for the transactions with NICIC, HSC and FIA were €755, €3,087 and €11,989, respectively. The last transaction generating revenue occurred on February 23, 2012, although DCC supplied warranty parts on April 18, 2012 for which they were not paid.
As a result of our policy against any sales into Iran unless for humanitarian purposes, neither Terex nor any of its foreign subsidiaries intend to conduct any future transactions into Iran."
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"A lobbying group that had targeted construction crane-maker Terex Corp. (TEX) over Iran's use of the company's cranes for public hangings said Thursday it is satisfied that Terex no longer does business in Iran. United Against Nuclear Iran said Terex demonstrated that it has received no revenue or profit from Iran since the third quarter of 2010, in keeping with the company's April 2010 policy prohibiting all new business transactions in Iran. 'We applaud Terex for ending its business in Iran,' said Mark Wallace, president of the group, in a written statement Thursday. 'Any socially responsible company should be appalled at the possibility of having its products used for gruesome public executions.' The New York-based group made Terex the first target of its 'Cranes Campaign' against companies whose machinery in Iran is used in executions where the condemned are hung from cranes and their bodies left to dangle for public display." (Dow Jones Newswires. "Terex Convinces Lobbying Group It Has Stopped Doing Business With Iran," 3/24/11)
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Terex is a Connecticut-based global manufacturer of industrial equipment, specifically for the construction, mining, utilities, forestry, and transportation industries (Company Website).
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Despite not listing Iran on its dealer locator, Terex sells cranes through the Iran-based Behrad Tehran Company, under its Terex Demag brand. The Behrad Tehran Company lists the mechanical specifications of over 30 Terex crane models, all of which are accompanied by photographs and made fully available for purchase (Behrad Tehran Company Website).
Additionally, Terex's "Terex Atlas" brand is licensed for "Product Sales" in Iran (Company Website).
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In 2009, the SEC questioned Terex's activites in Iran based on information from their 10-k form, noting the following:
"We note from disclosure in your Form 10-K that you currently operate in the Middle East, understood to include Iran, and that you intend to increase your operations in those regions. We note also that it appears from your website that nationals of Iran, Sudan and Syria can register as your suppliers, and that you sell products and provide service and support for your Terex Atlas brand in Iran. We are aware of a March 2006 news report that your joint venture, Inner Mongolia North Hauler Co. Ltd., sold products into Iran. We also are aware of a March 2007 news report that Terex Equipment Middle East LLC, the sales and marketing office for your Aerial Work Platforms segment, serves the market demand for your equipment in Iran and Syria, among other countries." (UPLOAD for TEREX CORP, 6/25/2009)
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In a correspondance with the SEC, Terex responded to their inquiries thusly:
"From time to time, various Terex foreign subsidiaries sell foreign-manufactured equipment for use in such industries in Iran, Sudan or Syria where permitted under U.S. and local law. Terex foreign subsidiary sales into Iran over each of the past three years are approximately as follows: Iran: $19.9 million in 2006, $11.8 million in 2007, and $11.1 million in 2008" (CORRESP for TEREX CORP, 7/17/2009)
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In 2004, O&K Mining, at that point owned by Terex, was listed as a supplier for Abad Rahan Pars Co. during its development of the South Pars Gas Field. O&K was sold in 2010, but was owned by Terex at the time of the project (Abad Rahan Pars Co. Resources).
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Terex has previously come under Congressional investigation for providing Scud missile launchers to Saddam Hussein's government in Iraq after eyewitness allegations were featured in the New York Times.
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Terex's Corporate Citizenship policy states that "the ethical behavior of Terex and its employees takes precedence over profits, sales, or other standards of success" (Company Website).
