Wednesday, December 19, 2012

Eye on Iran: Fresh U.S. Sanctions to Trap More Iran Oil Revenue

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"A little-noticed provision in U.S. sanctions against Iran beginning in February is likely to trap payments abroad for its oil exports running into billions of dollars, sapping Tehran of revenue needed to fund the government. A provision of the law U.S. President Barack Obama signed last summer, which goes into effect on Feb. 6, states that funds being used to pay for oil must remain in a bank account in the purchasing country and can be used only for non-sanctioned, bilateral trade between that country and Iran. Any bank that repatriates the money or transfers it to a third country faces a sanction risk. This could halt most of the flow of petrodollars to Iran, given that the value of its oil exports is far higher than what it imports from its biggest customers - China, South Korea, India and Japan. Sanctions on financial transactions with Iran have already made it difficult for buyers to pay for oil from the OPEC producer. South Korea is stuck with close to $5 billion as Iran is unable to pull the money out, a source with direct knowledge of the matter said. Iranian oil dues are also piling up in China, sources said, although it is unclear how much. India has an elaborate mechanism involving Turkey's central bank, through which it can transfer only half the money it owes Tehran. The new provision will add Japan, which has so far been able to settle its dues in yen, to the list of buyers saddled with funds owed to Iran."

AP: "Iran's president said Tuesday that Western sanctions could at the most cause a 'quick tap on the brakes' in Tehran's nuclear program but will not slow it down substantially, state TV reported. Mahmoud Ahmadinejad is quoted as saying that the 'West is not happy with Iran's progress' in technological fields including uranium enrichment - a possible pathway to nuclear arms. 'You think that by resorting to oil and currency issues, you are able to press the Iranian nation and stop it from its path? You are wrong. Maybe this works like a quick tap on the brakes in driving, but the Iranian nation will find its way quickly and will continue,' said Ahmadinejad... 'Do you really worry about a nuclear bomb?' Ahmadinejad ask. 'No, this is mere pretext. These are sheer lies. You are unhappy because you see Iran is progressing. You want to take revenge on the Iranian nation but you cannot.' He said the West should respect Iran's nuclear rights."

Motorship: "UANI (United Against Nuclear Iran, a US-based organisation that seeks to prevent Iran acquiring a nuclear weapons capability) has called on Wärtsilä to end its, according to UANI, 'irresponsible' business activities. UANI says that Wärtsilä, through its agents and licensees, provides technology and marine diesel engines to Chinese shipbuilders that are currently building oil tankers for the Iranian regime. It says that: 'Wärtsilä's activities are of particular concern given that the international community is attempting to isolate Iran via its shipping industry, and new tankers greatly assist the regime in attempting to overcome such efforts.' ... The letter mentions Wärtsilä's involvement in 12 VLCCs being built in China for NITC. It says: 'Put simply, Wärtsilä is assisting the Iranian regime's development of its most lucrative economic sector, the revenues from which go directly to fund the regime's nefarious activities, including its nuclear program. In addition, Wärtsilä's business in Iran includes a partnership with the Iran Heavy Diesel Engine Mfg Co... Wärtsilä's apparent partnership with DESA is clearly unacceptable.'"
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Reuters: "India plans to cut oil imports from Iran by 10 to 15 percent in the next fiscal year, and more if Tehran does not lower prices to help cover higher costs resulting from Western sanctions, a government source said. Iran's top Asian oil buyers - China, India, Japan and South Korea - have all reduced imports after the United States and the European Union imposed sanctions aimed at curbing Tehran's nuclear ambitions. The sanctions have more than halved Iran's oil exports this year, costing Tehran up to $5 billion a month in lost revenue. 'Next year our imports will be 10 percent to 15 percent less than this year,' said a government official with direct knowledge of the matter, who declined to be identified because he is not authorised to speak to the media. 'If they don't cut prices, the decline will be substantial. Indian refiners have genuine problems with credit availability.'"

Bloomberg: "Japan will import fewer than 160,000 barrels a day of oil from Iran next year to avoid sanctions aimed at the Middle Eastern country's nuclear program, the head of Japan's oil industry group said. JX Nippon Oil & Energy Corp., the country's biggest refiner, will cut its imports from the current contract of about 80,000 barrels a day, Kimura Yasushi, who serves as chairman for both JX and the Petroleum Association of Japan, said at a press conference today. Secretary of State Hillary Clinton in March exempted Japan from sanctions on banks doing business with Iran because of the Asian country's steps to reduce imports from the Persian Gulf nation. The waiver was renewed in September for a second six- month term for Japan, which was the world's biggest importer of Iranian crude after in China in the first half of 2011, according to the U.S. Department of Energy. Imports from Iran averaged 190,000 barrels a day from January to October, 40 percent less than the same period last year, and fell to 160,000 barrels a day in October, Kimura said. 'Maintaining that 160,000 barrels a day as a ceiling, refiners will look into reducing more, as JX cuts its own imports,' said Kimura, who declined to comment on how much purchases would be cut. 'We will tackle this while keeping a close eye on the U.S.'s policy on Iran.'"

AP: "House and Senate negotiators reached agreement Tuesday on a $633 billion defense bill that would tighten sanctions on Iran, increase security at diplomatic missions worldwide after the deadly Sept. 11 raid in Libya and presses the military on possible options to end the bloodshed in Syria... The administration had raised concerns about the new round of penalties on Iran and pressed negotiators for more flexibility. In a compromise, lawmakers gave the White House more time to implement the sanctions but balked at requests for additional waivers. The sanctions would hit Iran's energy, shipping and shipbuilding sectors as well as Iran's ports, blacklisting them as 'entities of proliferation concern.' It would impose penalties on anyone supplying precious metals to Iran and sanctions on Iranian broadcasting. 'We don't have any other choice at this time,' said Sen. John McCain, of Arizona, the top Republican on the Armed Services Committee. 'I hope with the administration we met most of their objections. But so far sanctions already enacted have not dissuaded the leaders and mullahs in Tehran on the path toward nuclear weapons that would destabilize the entire Middle East.'"

Foreign Affairs

Greenville News: "The State Department will use $1 million to address Iran's growing presence in Latin America under legislation drafted by a South Carolina freshman and on its way to the president for signing. The House passed the measure - the Countering Iran in the Western Hemisphere Act authored by Republican Rep. Jeff Duncan of Laurens - on Tuesday 386-6. President Barack Obama is expected to sign it. It was Duncan's first bill to pass Congress since he took office in January 2011. 'Iran's actions here in our neighborhood represent a real threat to our safety and security,' Duncan said Tuesday... The law says American policy is to work with allies in the region to deter threats to U.S. interests by Iran, the Iranian Islamic Revolutionary Guard Corps, the Quds Force and Hezbollah."

WashPost: "Iran's state-run media outlet PressTV, which broadcasts in English, on Tuesday carried a story blaming Israel for the school shooting at Sandy Hook Elementary. PressTV has a well-earned reputation for incendiary anti-Israel stories and for wild conspiracy theories, but even this seems a far stretch for the organization, which maintains a bureau office in the District. PressTV portrays Adam Lanza as a 'patsy' - their word - who is taking the fall for an Israeli special forces squad sent to punish President Obama for not better supporting Israel. The ongoing investigation is in fact, they argue, a concerted U.S. government "cover-up." It's not clear why the United States would cover-up an attack against the U.S. government, but if you think that's the most glaring inconsistency in this story then I have bad news for you: it gets a lot worse... The PressTV story is sad and upsetting, mostly for its incredible insensitivity but also, to a lesser degree, for the obvious bankruptcy of Iranian propaganda."

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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