Iran sanctions

More nations exempt from Iran sanctions

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The Obama administration said on Monday seven more economies would be exempt from its Iran-related sanctions that come into force at the end of the month, but left open the prospect that China could still face sanctions.

The state department said that Turkey, India, Taiwan, South Korea, Malaysia, South Africa and Sri Lanka had all reduced purchases of Iranian oil by enough to be given a six-month exemption from the sanctions, which come into operation on June 28.

Japan and 10 European countries have already been awarded an exemption.

The US announcement came as tensions that have simmered in recent weeks between Tehran and world powers over the future of Iran’s nuclear programme appear to have eased ahead of another round of negotiations next week in Moscow

After several weeks of fierce diplomatic disagreements, EU diplomats said a more positive mood had emerged following a one-hour telephone call between Catherine Ashton, the EU foreign policy chief, and Saeed Jalili, the Iranian chief nuclear negotiator on Monday night.

“Iran has backed down from demanding an experts meeting ahead of Moscow and has done a lot to clear the air,” said a senior EU official, following the telephone call. “There’s a sense now that after walking up the hill over the past few weeks, the Iranians are now walking down it again and the Moscow talks are very much on.”

The EU official revealed that, in the course of Monday evening’s phone call, Mr Jalili said he would engage with a detailed confidence building proposal that was put to Iran at the last meeting between the parties in Baghdad.

This would see Iran looking to freeze production of more highly enriched uranium in return for help with nuclear safety and its civil aircraft sector.

At the same time, Lady Ashton said the EU and the six powers would consider proposals put to them by Mr Jalili in Baghdad, which may include a possible peeling back of EU and US sanctions and a recognition of Iran’s right to continue some uranium enrichment.

The new US sanctions law was approved at the end of last year and allows the administration to impose sanctions on banks doing business with the Iranian central bank if a country has not “significantly reduced” purchases of Iranian oil.

In tandem with the EU, which is introducing a ban on Iranian oil imports, the US believes it is the new round of tougher sanctions that has brought Iran to the negotiating table. According to figures from the International Energy Agency, Iranian oil imports have dropped from an average of 2.5m barrels per day last year to 1.2m-1.8m this year.

However, US officials said that China, which has been the biggest buyer of oil from Iran, has not yet been awarded an exemption. A senior administration official said that the US was in a “good-faith dialogue” with China about its imports of Iranian oil and that it was “premature” to talk about potential sanctions. China is also one of the countries involved in the talks with Iran.

In the first few months of the year, China reduced its imports from Iran, though analysts believe this was the result of a dispute over price rather than a decision by the authorities to reduce purchases.