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US to grant sanction relief over oil supply

By Agencies in Washington and Beijing | China Daily | Updated: 2013-06-06 08:01

The United States was expected to announce that it will not impose sanctions against Chinese companies for another six months due to China's significant reduction of oil imports from Iran, an anonymous US official said on Tuesday.

The extension of the sanctions exemption comes ahead of President Xi Jinping's meeting with US President Barack Obama this week.

The decision will create a favorable atmosphere for the meeting between the two leaders, but Washington should not have imposed unilateral sanctions against Iran and the other countries according to US domestic law, observers said.

Banks and financial institutions of countries including Malaysia, Singapore, South Africa, South Korea and Turkey will also be exempted from any US penalties, according to the official, who demanded anonymity because he was not authorized to speak publicly on the matter.

China does not rely on Iran's oil as much as some of US alliances do, such as Japan and South Korea, which depend on Iran's oil heavily, so there is no reason for the US not to exempt Chinese companies, said Jin Canrong, a professor on international affairs with the Renmin University of China.

But the decision was conducive to Xi and Obama's upcoming meeting this week, he added.

Jia Xiudong, a senior researcher on international affairs at the China Institute of International Studies, said it was a wise decision for the US. "If the US imposes sanctions against Chinese companies and China takes countermeasures, this spiral will surely harm mutual ties."

Such measures would cause financial damage for both China and the US, the two biggest economies, and worsen commercial friction between them, The Associated Press reported.

China remains Iran's top trade partner and its biggest client for petroleum exports, with Japan, India and South Korea among the other top purchasers.

The Obama administration has introduced a series of new measures over the past week to step up the pressure on Iran over its nuclear program, which Washington suspects is aimed at making weapons but Iran insists is for generating electricity and medical research.

Washington has announced separate sanctions that for the first time directly targeted Iran's rial, going after foreign banks that purchase or sell significant amounts of the currency or who hold significant amounts in accounts outside Iran.

China Daily-AP

(China Daily 06/06/2013 page12)

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