Caterpillar Inc. has prohibited its non-U.S. subsidiaries from accepting orders known to be headed to Iran, the heavy-equipment manufacturer said in a letter to a lobbyist group.

Caterpillar, of Peoria, Ill., has acknowledged in the past that its equipment is sold in Iran despite U.S. sanctions that prohibit most American exports to the Islamic Republic. The company has said its foreign subsidiaries have conducted limited sales to independent dealers outside Iran, which resell to customers inside the country. Caterpillar has said those sales have been in full compliance with U.S. export regulations.

As recently as late last year, closely held Arya Machinery, with offices in Tehran, marketed itself on its Web site as Iran’s exclusive dealer of Caterpillar equipment. A senior sales executive at the company told The Wall Street Journal in October that Arya buys equipment from a Caterpillar subsidiary in Europe.

While it may be legal, it has become increasingly difficult for many multinationals to shoulder the public-relations burden that has come with even limited business with Iran. German engineering conglomerate Siemens AG in late January said it would wind down its Iranian business and not accept any more orders from the country.