Iran oil: India likely to be exempted from U.S. sanctions

Can import oil, but at much lower levels, after curbs take effect, says Pompeo

U.S. Secretary of State Mike Pompeo speaks during the United Against Nuclear Iran Summit on the sidelines of the United Nations General Assembly in New York City on September 25, 2018.

Eight countries will be given exemptions and “weeks longer to wind down” their trade with Iran, once U.S. sanctions against Iran kick in on November 5.

This was clarified by Secretary of State Michael Pompeo on Friday during a conference call with some members of the press.

EU not on list

Mr. Pompeo said the list of eight “jurisdictions” will be released on Monday, two of which have already reached zero levels of Iranian oil imports.

He also clarified that the European Union — which consists of 28 countries including the UK — will not be one of the jurisdictions granted a temporary exemption.

India — for whom Iran is the third largest source of oil after Iraq and Saudi Arabia — is expecting to be on the list as

The Hindu recently reported.

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In terms of entities granted exemptions, there would be no exemption for Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global financial messaging service, Treasury Secretary, Steven Mnuchin who was also on the call, said.

SWIFT — which does not hold money itself but transmits information on transactions — has a network that spans 200 countries and some 11,000 financial institutions as per data released by the company: if it is sanctioned, that will have a significant impact on organisations that use it. SWIFT has been told it will have to cut off from sanctioned entities as soon as technologically feasible or could face sanctions, Mr. Mnuchin said.

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The EU, which remains party to the Joint Comprehensive Plan of Action (JCPOA, the “Iran Deal”) has been frustrated by the U.S.’s withdrawal and has been searching for ways to work around the sanctions, including through the use of a Special Purpose Vehicle (SPV).

The U.S. plans to bring any SPVs within its sanctions net as well. “…If there are transactions that go through there that have the intent of evading our sanctions, we will aggressively pursue our remedies,” Mr. Mnuchin said.

Curbs on condensates

In terms of products, the U.S. will exempt food, agricultural products, medicines and medical devices. But there would be no exemptions for condensates — an ultralight oil which is a by-product of oil and natural gas production. Condensates are petroleum products but were not subject to Iran sanctions previously as they are not considered “crude oil”.

Iran had exported some $1.5 billion worth of condensates in just three months of 2014 to get around sanctions, the New York Times had then reported.

“This administration is treating condensate the same as crude,” Mr. Pompeo said on Friday.

The Trump administration has enacted 19 rounds of sanctions, and sanctioned 168 entities,Mr. Mnuchin said, adding that a list of 700 names, of which more than 300 are newly sanctioned, will be released on Monday.

The sanctions will penalise countries that do not end Iranian oil imports and foreign companies that do business with blacklisted Iranian firms.