Japan asks Washington to grant waiver on latest Iran oil sanctions

Kyodo

Japan has requested that the United States grant it a waiver from new sanctions it is leveling on Iran, pointing to the risk of another economic setback and its already extant plans to reduce oil imports, a senior Foreign Ministry official said.

Japan asked a U.S. delegation on Thursday to “flexibly” apply a bill signed into law by President Barack Obama on New Year’s Eve aimed at hampering Iran’s crude oil exports, the official said after a two-day meeting in Tokyo.

Japan, which imports about 10 percent of its oil from Iran, noted that the fragility of its economy since the March 11 disasters should be taken into account, although Tokyo well understands the need to step up pressure on Iran to curb its nuclear ambitions.

In addition to fears of another economic setback, Japan needs to import more energy from abroad because it has idled many nuclear reactors since the meltdowns at the Fukushima No. 1 power plant following the catastrophic natural disasters.

In seeking an exception from the United States, the Japanese side also pointed out that its oil imports from Iran have already been cut by 40 percent over the past five years and that this trend is almost certain to continue, said the official, who spoke on condition of anonymity.

The delegation expressed sympathy with Japan’s worries and said it is working to find the best way to avoid driving up oil prices and affecting the global economy, the official said.

The new law allows the banning of financial institutions found to have done business with Iran’s central bank — which clears most oil payments — from operating in the United States.

The law, however, says that the White House could grant a country a waiver to the sanctions if it has “significantly reduced its volume of crude oil purchases from Iran.”

But so far, even the United States has not reached a consensus on defining what significant reduction means.

The delegation was led by Robert Einhorn, the State Department’s special adviser for nonproliferation and arms control, and Daniel Glaser, the Treasury Department’s assistant secretary for terrorist financing.

The two sides did not strike a deal on whether or how to reduce Japan’s reliance on Iranian oil during the two-day discussions, the Foreign Ministry official said, adding bilateral consultations regarding the U.S. measures will continue in the weeks ahead.

Japanese officials said the new sanctions must be widely accepted by the international community, or otherwise be ineffective.

China and India, which also count themselves among Iran’s top oil importers, have said they will keep buying oil from the Islamic country, which is the Organization of the Petroleum Exporting Countries’ second-biggest producer.