General Motors says it has discussed the highly-contentious issue of sanctions against Iran with new partner, PSA Peugeot Citroen, but that the French automaker’s decision to suspend components shipments to partner, IKCO, was made before the recent alliance announcement.

The issue has become hugely sensitive with Hyundai revealing yesterday (3 April) it had stopped doing business with Iran – the latest automaker to temporarily suspend operations in the country which has faced repeated sanctions from the European Union (EU) and US concerned about its alleged nuclear weapons development.

US lobby group United Against Nuclear Iran (UANI) has mounted a concerted auto campaign identifying foreign companies doing business in Iran and working with Iranian regime-owned entities that licence-build foreign vehicles.

It highlights companies such as Mazda , Peugeot, Volvo and Fiat among others, with UANI claiming auto-manufacturing represents Iran’s second-most lucrative industry after oil and gas, as well as being a central component of Iran’s industrial sector.

The EU recently announced a series of further sanctions against Iran targeting certain banks in particular and it is this move that has triggered PSA’s latest decision to suspend component supply to Iran Khodro (IKCO).

“PSA has suspended [supply] of components to IKCO – the decision was taken for the month of March – just after the political decision about sanctions [concerning] sanctions to Iran,” a PSA spokeswoman told just-auto from Paris. “It is on a month by month basis.

“It depends on the political situation – it is because the banks can’t work any longer with Iran.”

For its part, General Motors insists PSA’s move was made well before the announcement of a Paris-Detroit alliance with the US automaker telling just-auto: “Obviously…we talked to our partners about this to understand what they were doing.”

However, GM is at pains to point out PSA’s decision to drop transport of components to Iran was made before the alliance was mooted. “We understand they [PSA] made the decision to suspend the production and shipment of material into Iran some time ago – before we entered into our alliance with them in fact – and have decided to continue with that suspension,” said the US manufacturer.

“Our agreement with them is fully compliant with US law governing trade with Iran and is not intended to benefit Iran in any way.”