Daily Israel Report

US Exempting Japan, 10 EU Countries on Iran

US president Barack Obama will exempt Japan and 10 EU states from banking sanctions, allowing trade with Iran.
By Gabe Kahn.
First Publish: 3/20/2012, 10:22 PM

Barack Obama
Barack Obama
Reuters

US officials said Tuesday that the United States will exempt Japan and 10 European Union nations from US financial sanctions because they have "significantly reduced purchases of Iranian crude oil."

The provides a respite for the 11 countries, whose banks faced being cut off from the US financial system under new US sanctions designed to pressure Iran into abandoning uranium enrichment.

The EU nations include Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland and Spain, according to the US State Department.

The list did not, however, include China and India, Iran's top two crude oil importers, nor US allies South Korea and Turkey, which are among the top 10 consumers of Iranian oil.

Under the 2012 National Defense Authorization Act, US President Barack Obama is empowered to impose financial sanctions on foreign banks conducting financial transactions with Iran's central bank "for the purchase of petroleum or petroleum products from Iran."

However, the law allowed Obama to grant exemptions to country's whose primary jurisdiction over a given bank has "significantly reduced" its volume of crude oil purchases from Tehran.

The US has gradually tightened sanctions because of Iran's failure to answer questions about its nuclear program, which Washington and its allies suspect is a cover for developing nuclear weapons.

Several rounds of sanctions by the European Union and United States have caused the Iranian rial to plummet and closed most channels for purchasing and insuring crude oil to be exported from Iran.

While Iran's Supreme Leader Ayatollah Ali Khamenei on Tuesday said Iran would “resist all pressure,” Tehran has hinted it may be willing to halt uranium enrichment ahead of renewed nuclear talks with the five permanent members of the UN Security Council, plus Germany.

Last week, Mohammad Javad Larijani – a key Khamenei advisor – said the West should accept Iran's "peaceful nuclear program," sell Iran 20 percent enriched uranium, and provide the customary assistance nuclear nations provide to those building nuclear power plants.

In return for cooperation from the West, Iran would offer "full transparency" and “permanent human monitoring” of its nuclear facilities, Larijani said.

He did not say Iran would halt uranium enrichment – a key demand by Jerusalem and Washington to avoid military strikes – but observers say the stipulation that the West provide 20% enriched uranium indicates Iran is open to doing so.