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China, Singapore Excluded From U.S. Sanctions Targeting Iran

An oil worker repairs a pipe at an Iranian petroleum refinery in 2000. The United States on Thursday granted China and Singapore temporary exemptions from financial penalties against state purchasers of Iranian oil (AP Photo/Vahid Salemi). An oil worker repairs a pipe at an Iranian petroleum refinery in 2000. The United States on Thursday granted China and Singapore temporary exemptions from financial penalties against state purchasers of Iranian oil (AP Photo/Vahid Salemi).

China and Singapore on Thursday received an eleventh-hour reprieve from U.S. sanctions intended to financially strain Iran's petroleum sector over the Middle Eastern nation's disputed atomic efforts, the New York Times reported (see GSN, June 28).

Observers considered China's exclusion from the penalties to have prevented a possible grave standoff between Beijing and Washington, which have coordinated with four other major governments in a diplomatic campaign to address Tehran's nuclear activities. The United States and its allies fear the atomic initiative is geared toward establishment of a weapons capability; Iran insists its nuclear ambitions are strictly peaceful.

The U.S. punitive measures -- signed into law late last year and due to take effect on Thursday -- could place U.S. financial networks off limits to financial institutions in countries targeted for importing petroleum from Iran. The latest U.S. exclusions increased to 20 the number of governments granted temporary immunity from the penalties after curbing their reliance on oil from the Persian Gulf regional power.

“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,” Clinton said in released comments.

When the European Union on Sunday starts the scheduled implementation of a ban on Iranian petroleum, Tehran “will understand even more fully the urgency of the choice” it must make “and the unity of the international community,” Clinton said (Rick Gladstone, New York Times, June 28). The EU measure could reduce the nation's petroleum income by 50 percent, Radio Free Europe/Radio Liberty on Friday quoted financial analysts as saying (Golnaz Esfandiari, Radio Free Europe/Radio Liberty, June 29).

Clinton called on Iran to "demonstrate its willingness to take concrete steps toward resolving the nuclear issue" when its representatives meet on Tuesday for a technical discussion with counterparts from China, France, Germany, Russia the United Kingdom and the United States. "Failure to do so will result in continuing pressure and isolation from the international community," she warned.

Next week's exchange in Istanbul, Turkey, would follow three higher-level multilateral meetings convened this year (U.S. State Department release, June 28).

A disagreement between China and Iran over oil expenses to an extent accounts for a 2012 drop in Beijing's imports of Iranian petroleum, the Times reported.

Still, Beijing appears to have authentically pursued curbs partly in reaction to the U.S. law, according to Obama administration insiders. China's imports over the first five months of 2012 were only 75 percent of the quantity from the same span of the prior year, they said (Gladstone, New York Times).

“Secretary Clinton has assured me that at this time China has met the significant reduction standard required by the law and recent precedent to qualify for an exemption from sanctions,” Senator Robert Menendez (D-N.J.), a key backer of the sanctions law, said in remarks quoted by Bloomberg. “The Chinese, however, will have to be mindful that the law requires a significant reduction every 180 days to continue qualifying for an exemption and that we will expect to see additional significant reductions by China and other nations.”

Representative Ileana Ros-Lehtinen (R-Fla.), though, accused President Obama of providing Beijing with "a free pass."

“If the administration is willing to give China, a country that has aided the Iranian regime’s efforts to acquire nuclear capabilities, a free pass, who is it willing to sanction?” she asked in e-mail remarks.

Singapore received roughly 2.2 million tons of Iranian oil products over the five months of the year, but purchased no Iranian petroleum in 2011, according to Bloomberg.

"We welcome the U.S. decision,” the Singaporean Foreign Ministry stated in an e-mail. “Since May 2012, no Iranian crude oil was imported" (Lakshmanan/Atlas, Bloomberg, June 29).

Meanwhile, Iranian Foreign Minister Ali Akbar Salehi and his German equivalent Guido Westerwelle addressed the multilateral atomic dialogue during a Friday telephone discussion, Iran's Press TV reported (Press TV, June 29).

Senior Iranian nuclear negotiator Saeed Jalili on Thursday said his country is prepared to "share initiatives that can make the talks a success and move them forward," Agence France-Presse reported.

Any forward movement must be founded on "cooperation and a framework of building trust," he said in a written communication to EU foreign policy chief Catherine Ashton.

"If the constructive talks are damaged, the responsibility will be with the party that is implementing illegal tools instead of logic in the negotiations," Jalili wrote (Agence France-Presse/Google News, June 28).

Iran intends to arm ships in the Strait of Hormuz with longer-range, stealth-capable missiles, the state-run Mehr News Agency quoted the Iranian Revolutionary Guard's naval chief as saying.

“We have already installed missiles with a range of more than [136 miles] on our vessels, and we are hopeful that domestically manufactured missiles with a range of more than [186 miles] will be operational soon,” Rear Adm. Ali Fadavi said in remarks published on Friday on the Revolutionary Guard's website (Mehr News Agency, June 29).

"We could target from our shores all areas in the Persian Gulf region, the Strait of Hormuz and the Sea of Oman," Reuters quoted him as saying. Officials and lawmakers in Iran have previously said their country could close the strait, which is key to transport of oil from the region, in retaliation to a military strike or an embargo on petroleum sales (Reuters, June 29).

Saudi Arabia is preparing to resume use of the Iraqi Pipeline in Saudi Arabia, an oil transfer system offering an alternative to the strategic waterway, United Press International quoted petroleum sector insiders as saying.

The United Arab Emirates is set to begin operating another line that would offer an alternate route for the country's Abu Dhabi oil supply. Still, the line is vulnerable to Iranian armaments, according to UPI (United Press International, June 28).

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