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U.S. exempts 7 major importers of Iranian oil   

Tehran Times - 13 June, 2012

The Obama administration announced on Monday that it would exempt seven major importers of Iranian oil from sanctions because these countries had reduced their oil purchases from Iran.

Secretary of State Hillary Rodham Clinton announced that the administration had issued waivers to India, Malaysia, South Korea, South Africa, Sri Lanka, Turkey and Taiwan. They joined Japan and 10 European countries that the United States had previously said would be exempt from sanctions for six months.

Still, the absence of China from the waiver list indicates the hurdles the Obama administration faces in persuading Iran’s largest customer to curtail its purchases. And it sets up a potential collision with China, which along with the United States is a member of the group of major powers that is negotiating with Iran over the future of its nuclear program.

Under legislation that President Obama signed in December, the United States must take action against countries that continue buying large volumes of crude oil through Iran's central bank by cutting off from the American banking system the financial institutions engaged in those transactions in those countries.

China's case is complicated, since oil analysts estimate that its purchases from Iran declined by a third during the first quarter of 2012. China was in a price dispute with Iran, however, suggesting that it was cutting back as a negotiating tactic. In April, its purchases spiked again, and the upswing continued into June.

Experts on sanctions said they were not surprised by the administration's decision to withhold an exemption from China.

'They don't want to issue the exception to China now, and then face pressure to revoke it in the next 180-day period,' said Mark Dubowitz, executive director of the Foundation for Defense of Democracies and an expert on Iranian sanctions. China is also using channels to buy oil that go around the Central Bank of Iran, which could give it a loophole to keep buying oil without triggering the sanctions.
 
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