To punish Iran for backing terrorism and going nuclear, Washington has slapped on trade sanctions and moved aggressively against its banking industry. But in one area, business between the two nations is booming smokes.

Exempted from the sanctions regime as agricultural products, U.S. tobacco exports to Iran have grown to $142 million over the past five years and now dwarf those all other American goods shipped there.

From 2002 to 2005, Tobacco made up nearly half the value of all U.S. exports to Iran, according to trade data compiled by the U.S. Census Bureau. The $5o million worth of tobacco products shipped there in 2005.
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