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US exempts China from Iran oil sanctions for 6 months

The United States has granted China a last-minute, six-month exemption from financial penalties for buying Iranian oil, as the latest trance of US sanctions aimed at Iran’s crude exports kicked in on Friday.

Iran nuclear iaea BushehrEnlarge
The reactor building at the Russian-built Bushehr nuclear power plant in southern Iran, 750 miles south of Tehran. (Majid Asgaripour/Getty Images)

The United States has granted China a last-minute, six-month exemption from financial penalties for buying Iranian oil, as the latest trance of US sanctions aimed at Iran’s crude exports kicked in on Friday.

According to Reuters, Secretary of State Hilary Clinton said both China and Singapore, which was also granted a temporary reprieve, had earned the exemption by cutting imports of Iranian crude, and insisted in a statement that the reductions carried out by Iran’s 20 major oil buyers – all of whom have now been exempted from the latest sanctions – had made a clear impact:

“Their cumulative actions are a clear demonstration to Iran’s government that Iran’s continued violation of its international nuclear obligations carries an enormous economic cost,” she said.

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Under US legislation that came into force at the end of 2011, countries had to show they had made significant reductions to the amount of crude they importing from Tehran by June 28, on penalty of being shut out of the US financial system, according to the BBC.

Chinese imports from Iran dropped sharply over the first five months of this year, but this was mainly due to an ongoing pricing dispute.

The sanctions are intended to pressure Iran into halting its controversial uranium enrichment program, which Tehran insists is for purely civilian purposes. According to The Financial Times, the measures have sharply cut Iran’s crude exports, with some analysts predicting that monthly exports may be almost halved next month from July 2011.

China has opposed the latest set of US sanctions, which ban firms that engage with the Iranian central bank from business in the US. Officials in Beijing insisted earlier this month that purchases of Iranian crude are “legitimate,” The Wall Street Journal reported

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http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/120629/us-exempts-china-iran-oil-sanctions-six-months