Washington fleshes out sanctions against Iran, issues no waiver to EU

Officials and news reports indicated the countries receiving waivers from sanctions would likely include US allies India, Iraq, Italy, Japan and South Korea.
Sunday 04/11/2018
Gas flares from an oil production platform at the Soroush oil fields south of Tehran. (Reuters)
In hot water. Gas flares from an oil production platform at the Soroush oil fields south of Tehran. (Reuters)

WASHINGTON - The United States plans to allow eight countries to temporarily continue to import Iranian oil without facing US sanctions, US officials said.

US Secretary of State Mike Pompeo did not name the countries exempted from US sanctions aimed at depriving Iran of oil revenue though he did say the European Union would not receive a waiver. Pompeo said countries receiving waivers tried to eliminate Iranian oil imports but could not do so.

Iranian banks designated by the United States will be cut off “as soon as technologically feasible” from a global system called SWIFT that oversees international bank transfers, US Treasury Secretary Steven Mnuchin said. “Humanitarian transactions” involving banks not designated by the United States will be allowed to continue using SWIFT, Mnuchin added.

Officials and news reports indicated the countries receiving waivers from sanctions would likely include US allies India, Iraq, Italy, Japan and South Korea. The United States is considering waiving sanctions for China, which is the largest importer of Iranian crude, and Turkey.

The Economic Times newspaper reported that the United States had agreed to let India import substantial amounts of Iranian oil until March. India and China buy more than half of the 1.8 million barrels per day of oil that Iran exports, the US Energy Department said.

Several countries lobbied the Trump administration heavily for a waiver from US sanctions, contending that their economies cannot function if they cut all purchases of Iranian oil or are hit with US sanctions that include losing access to the US banking system and commercial market.

“We want to achieve maximum pressure [on Iran] but don’t want to harm friends and allies and we are working our way through that,” John Bolton, US national security adviser, said in speech October 31. Apparently in a reference to Iraq and Turkey, Bolton said US officials understand that “a number of countries immediately surrounding Iran… may not be able to go all the way to zero [Iranian oil imports] immediately.”

US State Department Deputy Press Secretary Robert Palladino on November 1 said US officials “are prepared to work with countries that are reducing their imports on a case-by-case basis. We have an internal process to consider significant reduction exceptions for individual countries.”

Palladino added that the United States “is in the middle of an internal process to consider significant reduction exemptions for individual countries.”

The US sanctions bar any country that imports Iranian oil or invests in Iran from doing business in the United States and from using US dollars for international transactions.

The reinstatement is the final step of a process that began in May when Trump announced he was withdrawing the United States from the nuclear deal negotiated by his predecessor Barack Obama. The accord, known as the Joint Comprehensive Plan of Action, waived and lifted sanctions against Iran in exchange for Tehran halting its programme to develop nuclear weapons.

Pompeo predicted that the Iranian regime would face enormous pressure when the oil-sector sanctions resumed. “I’m convinced these sanctions are going to have an enormous impact on the Iranian leadership,” Pompeo said in a November 1 interview on the Lars Larson radio programme. “Nearly every significant European company has already fled Iran.”

Pompeo waived off recent criticism by Iranian Foreign Minister Mohammad Javad Zarif, who told CBS News on October 28 that US support for Saudi Arabia and Israel “has enabled them to carry out atrocities that would not have happened had there not existed this blanket support, blind support.”

“The kingdom of Saudi Arabia has been a great partner with us in pushing back on the Iranian regime in an effort to change its behaviour by assisting and ensuring that there is sufficient crude oil in the marketplace — for all the crude oil that the Iranian regime will no longer be able to sell in order to fund its terror campaign across the world,” Pompeo said.

The oil and financial sanctions will cause much more harm to the Iranian economy than sanctions the United States reinstated in August that prohibit Iran from using US dollars and bar purchases of Iranian goods such as automobiles and metals.

Iranian oil exports and production have fallen sharply since the United States said it was withdrawing from the Iran nuclear deal and are likely to continue to decline, the US Energy Department said. Iran’s total oil exports fell from 2.7 million barrels per day in June to 1.9 million barrels a day in September, an Energy Department report stated.

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