Wavering on Sanctions

State waives Iran sanctions for 11 nations to allow importation of crude

March 14, 2013

The Obama administration has granted Iran sanctions waivers to 11 countries, allowing them to import Tehran’s heavily sanctioned crude oil for another 180 days as they attempt to wean themselves off of the product.

Secretary of State John Kerry announced Wednesday that Japan and 10 European countries would be granted waivers, which permit them to import low levels of Iranian crude oil and perform certain financial transactions with Iran.

"I am pleased to announce that based on additional significant reductions in the volume of its crude oil purchases from Iran, Japan has again qualified for an exception to sanctions," Kerry said in a statement.

The 10 European countries were granted waivers because they had not purchased Iranian oil since July of last year when a tough new round of European Union sanctions on Tehran were enacted.

"Additionally, 10 European Union countries—Belgium, the Czech Republic, France, Germany, Greece, Italy, Netherlands, Poland, Spain, and the United Kingdom—have also qualified for a renewal of the [sanctions] exception because they have not purchased Iranian oil since July 1, 2012, pursuant to a decision made by the whole of the European Union in January 2012," read Kerry’s statement.

This is the third consecutive time that many of these countries have been granted a similar waiver by the Obama administration. Without the official reprieve, these countries could be cut off from the United States financial system.

"I will report to the Congress that exceptions to sanctions … will apply to the financial institutions based in these countries for a potentially renewable period of 180 days," the statement said.

Japan remains one of the few countries to still import significant levels of Iranian crude oil. The country was importing 160,000 barrels of Iranian oil a day as of December 2012, according to Bloomberg.

"Most of these exceptions were provided to countries that no longer import any Iranian oil—the only real case study here is Japan which significantly reduced its Iranian crude imports to win this exception—and that means continued pressure on Iran's economy and continued loss of oil revenue," said one senior congressional aide familiar with the waivers.

Congressional observers will be eyeing China and India, Iran’s largest customers, in the weeks to come, the source said.

"Far more important will be what China and India do over this period and whether they will cut enough imports to win an exception in the weeks ahead," said the aide.

While some nations have drastically cut back, some Asian countries continue to purchase oil from Iran, sanctions experts warned.

"These 11 countries have generally done a good job cutting their imports of Iranian oil. Unfortunately, their helpful actions are being cancelled out by some of the Asian buyers that will be up for more waivers in June," said Nathan Carleton, spokesperson for United Against Nuclear Iran (UANI), a nonpartisan advocacy group that pressures international companies to cease dealings with Tehran.

"We hope that the Obama administration will act decisively then, and only grant waivers to nations that have cut their imports to zero, or that present a plan showing that the level will be at zero by the end of 2013," Carleton said. "Granting waivers-en-masse in June would be a major mistake, since Asian oil demand is expected to rise in 2014, and make this process more difficult."

Kerry noted in his statement that the U.S. would continue to pressure Iran until it is fully transparent about its nuclear ambitions.

"The United States and the international community remain committed to maintaining pressure on the Iranian regime until it fully addresses concerns about its nuclear program," Kerry said.

Kerry said the waivers, which some view as detrimental to a tough sanctions regime, are a sign the West is getting serious about pressuring Iran.

"Today’s determination is another example of the international community’s commitment to convince Iran to meet its international obligations," Kerry said. "A total of 20 countries and economies have continued to significantly reduce the volume of their crude oil purchases from Iran."

"The message to the Iranian regime from the international community is clear: Take concrete actions to satisfy the concerns of the international community or face increasing isolation and pressure," the statement continued.

Iran’s state-run media hailed the waivers and called sanctions illegal.

"Washington and the European Union have imposed several rounds of illegal sanctions against the Islamic Republic over a false allegation—spearheaded by the United States, Israel, and their European allies—that Iran is pursuing non-civilian objectives in its nuclear energy program," Iran’s state-run news network, Press TV, reported Wednesday.

Iran claims to have exported nearly $7 billion in liquid gas products last year despite tightening sanctions.