US code may grant Iran oil exemption to Turkey

US code may grant Iran oil exemption to Turkey

US code may grant Iran oil exemption to Turkey

The US Senate is irked by Turkey’s gas imports from Iran with gold, which bypasses the current transaction sanctions. REUTERS photo

A broader range of economic sanctions on Iran, which were approved by the U.S. Senate last week, will probably keep in place exemptions for countries that have made significant cuts to their purchases of Iranian crude oil, but the code, when approved by the House of Representatives and U.S. President Barack Obama will bring extra burdens for Ankara, as it aims at cutting Turkey’s gas trade with Iran de facto by gold. The senators who prepared the code, had pledged for cutting Turkey’s “gold for gas game.”

Turkey’s oil imports from Iran fell by a sharp 30 percent in October on the eve of the revision on exemptions. India, China and South Korea also cut their oil imports from the Islamic republic.
The measures claim to increase the pressure on Tehran to stop efforts to enrich uranium to levels that could be used in weapons. Iran says its nuclear program is peaceful.

The package, passed 94-0, is now part of the annual defense policy bill.

Here are some of the features of the sanctions package, developed by Senators Robert Menendez, a Democrat from New Jersey, and Mark Kirk, a Republican from Illinois:

  • Transactions for goods and services with Iran’s energy, oil, port, shipping and ship-building sectors could be targeted.
  • Exceptions: oil imports to countries that have obtained a formal “exception” for cutting oil purchases; natural gas purchases as long as importers hold payment for Iran in an account to be drawn on for permissible trade.
  • Food, agricultural commodities, medicine, medical devices, humanitarian aid are exempt.
  • Places sanctions on trade with Iran in precious metals, graphite, raw or semi-finished metals, such as aluminum and steel, metallurgical coal and software for integrating industrial processes in Iran’s energy and shipping sectors.
  • Puts sanctions on insurance or reinsurance providers for trade with Iran in energy, shipping and ship-building sectors, as well as with designated persons and entities.
  • Puts sanctions on foreign banks that handle transactions for Iranians who have been designated by the United States.
  • Blacklists the Islamic Republic of Iran Broadcasting and its president, preventing others from doing business with it.
  • Requires the Obama administration to report every 90 days on whether Iran is using any of the materials targeted by sanctions, such as precious metals, graphite or steel, in barters or swaps.
  • Requires the administration to report within 180 days on vessels that have entered Iranian ports controlled by the Tidewater Middle East Company, and on airports where Iranian aircraft subjected to sanctions have landed.