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US Exempts 11 Nations From Iran Sanctions

3/21/2012 2:03 AM ET

The United States on Tuesday exempted eleven nations, including japan and ten European Union member-states, from its new tough sanctions on Iran as they have significantly reduced purchases of Iranian crude oil.

The move gives the banks of the eleven nations named in the exemption list a six-month reprieve from being hit by penalties under the new U.S. sanctions aimed at forcing Iran to drop its disputed nuclear program.

Notably, the list did not include China and India as well as staunch American allies South Korea and Turkey. While China and India are the top two Iranian crude importers, South Korea and Turkey are among the top-ten consumers of Iranian oil.

The nations exempted from the list risk being cut off from the U.S. financial system unless they start reducing their consumption of Iranian oil significantly by June 28, when the new U.S. sanctions are to take effect.

Japanese Finance Minister Jun Azumi welcomed the exemption of his country from the new U.S. sanctions on Iranian oil and said Tokyo planned to reduce its imports of Iranian oil at a set rate in the future. It is estimated that Japan reduced its purchase of Iranian oil by 15 to 22 percent in the second half of last year.

Although all of the 27 EU members-states banned new Iranian oil imports from January 23 and agreed to phase out their existing purchase contracts by July 1, it is reported that the 17 EU members not included in the exemption list had stopped importing Iranian oil last year itself.

The EU member-states included in the list announced by the U.S. State Department on Tuesday were Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland and Spain

While announcing the list, Secretary of State Hillary Clinton acknowledged that the "actions taken by these countries were not easy," and added: "We commend these countries for their actions and urge other nations that import oil from Iran to follow their example."

The U.S. has imposed a series of sanctions on Iran, including those signed into law by President Barack Obama in December with the intention of crippling the Islamic Republic's oil revenue that financed the country's disputed nuclear program.

The measures authorized the U.S. administration in December to bar foreign financial institutions that engage in financial transactions with Iran's central bank and oil sector, making it difficult for Tehran to sell its crude oil in the international market. The Obama administration has six months to impose the sanctions, which also carry the option of waiving penalties for national security reasons.

The U.S. had earlier banned its banks from doing business with the Iranian central bank. Moreover, the U.S. Senate had approved new economic sanctions against Tehran in December, targeting companies in joint uranium mining projects and organizations supplying the country with weapons. Also, the U.S. had joined Britain and Canada in November in slapping new sanctions on Iran to ratchet up pressure on the country to roll back its disputed nuclear program.

The West hopes that the new sanctions will force Iran to rejoin the stalled negotiations with the six world powers over its disputed nuclear program. Although Iran maintains its uranium enrichment work is aimed at producing fuel for a medical-purpose reactor, the West suspects Tehran's claims are just a cover-up for producing weapon-grade uranium.

Iran has already survived four sets of sanctions imposed by the U.N. Security Council following refusal to halt its uranium enrichment, including the one imposed in June 2010. Since then, the six world powers have held two rounds of talks with Iran, once in Geneva in December 2010 and again in Istanbul in January 2011. Both negotiations failed to reach any agreements on the issue.

The latest development comes just days after the six world powers accepted an Iranian offer for fresh talks on the Islamic Republic's controversial nuclear program. Iranian nuclear negotiator Saeed Jalili had informed EU Foreign Policy chief Catherine Ashton last month that Iran was prepared to resume the stalled nuclear talks "in a constructive way."

by RTT Staff Writer

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