US extends Iran sanctions relief to China

The Obama administration will extend six-month sanctions exemptions to China, India and seven other countries for significantly reducing oil imports from Iran, officials have said, as the US imposed new measures against companies believed to be acting as a front network to help the Iranian government evade international financial restrictions.
The waivers will be announced today, said the officials yesterday, who demanded anonymity because they were not authorised to speak publicly on the matter. Banks in Malaysia, Singapore, South Africa, South Korea, Sri Lanka, Turkey and Taiwan also will be exempted from any US penalties.
The Obama administration has introduced a series of new measures over the past week to step up the pressure on Iran over its nuclear programme, which Washington suspects is aimed at making weapons but Iran insists is for generating electricity and medical research. Washington hopes the pressure will force Iran to come clean on its nuclear activity so that the US and its allies don't have to engage in any military intervention to prevent the Islamic republic from obtaining an atomic arsenal.

Washington's most ambitious tactic has involved pressuring countries around the world to cut commercial ties with Tehran or likewise face a series of restrictions on what type of business they can conduct in the United States, the world's largest market. The US, however, has yet to punish any of its international trading partners since instituting Iranian petroleum sanctions last year, leading observers in Congress and elsewhere to question if the threat of American action is real.
China remains Iran's top trading partner and its No. 1 client for petroleum exports, with Japan, India and South Korea among the other top purchasers.

One US official stressed that Chinese imports showed an honest decrease, especially when crude oil is accounted for in calculations.
In reality, though, it is difficult to imagine the Obama administration imposing wide-scale penalties on Chinese banks and financial institutions even if Beijing hadn't scaled back business with Tehran. Such measures would cause financial damage for both China and the United States, the world's two biggest economies, and worsen commercial friction between the powers just as Chinese President Xi Jinping prepares to visit the US later this week for a summit with President Barack Obama.