France's Foreign Ministry is confirming a highly controversial visit this week by French businesses association, MEDEF, which took 100 companies to Iran, with PSA also saying one of its board members attended, albeit in a capacity as metalworking industries president.

The trip appears to have caused considerable irritation in Washington, where the State Department apparently criticised the business delegation, noting sanctions against Iran could not be broken, even if they had recently relaxed slightly.

Western powers imposed a series of crippling sanctions on Iran in an attempt to dissuade Tehran from what they see is its ambition to enrich uranium for nuclear weapons, but recent breakthrough talks in Geneva saw limited progress on trade barriers that some have speculated could lead to the auto industry benefiting by up to US$500m.

Both Renault and PSA have maintained ties with Iran and a recent automotive conference in the Iranian capital, also saw a significant delegation from French suppliers association, FIEV, led by its vice president, Arnaud de David-Beauregard, attend with 16 companies from the body.

PSA however, is at pains to point out the participation this week of board member, Frederic Saint-Geours, in the Tehran visit, was in his capacity as president of French metalworking association, UIMM (Union des Industries et Metiers de la Metallurgie).

"He [Saint-Geours] is still on the board but he is not directing specific projects," a PSA spokeswoman told just-auto from Paris. "Saint-Geours was part of that delegation.

"PSA was not related to that delegation because we have already contact with our partners in Iran. He is president of the UIMM - it was in that role he was with Iran. He is directly related to Philippe Varin [PSA CEO] but is on a special mission at the moment - he is working on various projects."

Comments by French Foreign Minister, Laurent Fabius' spokesman and sent to just-auto, confirm the MEDEF visit, although the overseas department was careful to couch the trip in diplomatic language.

"This is an exploratory MEDEF initiative in a strict legal framework - that is to do with the intermediate agreement reached with Iran - which temporarily suspends certain sanctions," said the spokesman.

The PSA spokeswoman added Varin continued to be CEO of the automaker with successor, Carlos Tavares, joining the company on 1 January.

"We are not announcing he [Varin] is retiring yet - we will make no further announcement until 19 February with our yearly results," she said.

"Tavares joined the company on 1 January and will be taking over within this year, but we do not set a date."

MEDEF was not immediately available for comment.