State Department spokeswoman Victoria Nuland said the exemptions for the 11 were meant to set an example for the other countries,
The sanctions don’t take legal effect until June 28, so the exemptions issued this month came three months before any action needed to be taken.
The US action exempted from sanctions all 10 of the European Union states that bought Iranian crude last year. But the EU voted January 23 to phase out any and all purchases of Iranian crude by July 1, so the waiver granted them was pro forma.
The exemptions are to be given countries that the president concludes have “significantly” reduced their purchases of Iranian crude. The exemption allows them to continue buying Iranian oil at lesser volumes.
But the 10 European states don’t really need an exemption since they aren’t going to be buying any Iranian crude as of July 1, two days after the sanctions are to take effect.
The 11th country to win an exemption was Japan. It does plan to continue buying Iranian oil, although in lower volumes, so it does require an exemption.
Pointedly, no exemption was given at this time to South Korea, Turkey or India, three major buyers of Iranian crude. The public announcement of the exemptions granted the others appeared intended chiefly to goose those three countries. China also wasn’t exempted and doesn’t appear to be seeking an exemption, although it has reduced Iranian oil buys.
Sri Lanka, the only country to get all its crude from Iran, has announced it is halting all purchases of Iranian oil. But it was not awarded an exemption, suggesting that Washington may not believe the Sri Lankan government. But, again, if it really ceases buying Iranian crude, it doesn’t need an exemption allowing it to buy Iranian crude.
Washington has still not announced what it considers a “significant” reduction that will justify an exemption. And its description of what Japan has done to qualify was not very helpful.
A senior State Department official who briefed reporters made this statement about Japan: “The specifics of the actions that Japan has taken and that they’re seeking to pursue in the future entails specific commercially protected information.” In other words, the official would not say a word about what Japan has pledged to do.
The official went on to say: “What is available publicly is that, over the last six months of 2011, depending on the data sources that you look at and the seasonal adjustment of the data, that Japan decreased its imports of Iranian crude between 15 and 22 percent.” He also said that Japan was a special case and had cut Iranian crude imports despite shutting down its nuclear reactors after last year’s tsunami and requiring more oil to run power plants.
Many reporters took that to mean other countries would need to cut imports by 15 to 22 percent. But that was the amount by which Japan cut imports in the second half of 2011, while the law requiring “significant” reductions was only signed December 31 and thus refers to reductions after December 31, not before.
The official said the United States has started conversations with other countries about exemptions. He did not name any countries with which the United States was talking, however.
Carlos Pascual, the State Department’s special envoy and coordinator for international energy affairs, told Bloomberg news the Administration wanted other countries to come in with specific plans detailing what they would be doing in the future, not what they did in the past.
“What we are looking for is for countries to come to us and tell us if they believe that they should be in that category that deserves an exemption, what are the kinds of significant reductions that they are willing to pursue.” Only the EU and Japan have yet communicated a specific policy on cutting Iranian crude purchases.
Of the 13 countries that bought Iranian crude last year and have not received an exemption, one is Morocco. State Department officials said Morocco stopped all Iranian crude buys last year and so does not require an exemption.
The countries still believed buying are: China; India; South Korea; Turkey; South Africa; Sri Lanka; Indonesia, Malaysia; Pakistan; Philippines; Singapore and Taiwan.
In Tehran, Majlis Deputy Kazem Jalali said the award of exemptions was a retreat by the United States indicating the failure of sanctions.
Jalali told the Iranian Students News Agency (ISNA), “The decision is a clear retreat by the United States and shows that, although sanctions could be implemented by the United States and certain European countries, they have not been studied expertly in many cases.”
Deputy Alaeddin Borujerdi said rising oil prices caused by sanctions had compelled the United States to grant exemptions. He seemed to believe the exemptions allowed a country to buy more Iranian oil, although the exemption means new sanctions cutting off a country’s access to US banks would not be applied because a country was buying less Iranian crude.
The 10 European countries that bought Iranian oil last year and have now received exemptions were: Belgium, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain and Britain.
The exemption can only be granted for 180 days and then must be renewed or sanctions will be applied. That means a country can’t stop buying Iranian oil, get an exemption and then start buying Iranian oil again.