Israel Matzav

India joins sanctions against Iran

India, which imports 400,000 barrels of crude oil a day from Iran, took action this week barring companies from dealing with Iran through the Asian Clearing Union (ACU), a financial clearinghouse that includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.

This clearing house allows central banks to handle payments to their countries' companies, and -- according to a Wall Street Journal article -- makes it possible to obscure which firms are doing business.

According to the WSJ, the US Treasury has regularly raised the issue with India, and that discussion on this matter accelerated after Obama's visit, when he endorsed permanent membership for India on the UN Security Council.

According to the report, the US has told New Delhi that Indian firms conducting transactions through the ACU run the risk of violating a US law signed in July banning international firms from doing business with 17 Iranian banks and much of Teheran's oil and gas sector, as well as the Revolutionary Guard. If Indian companies are found in violation, they could be banned from doing business in the US, the report said.

While India imports about 14 percent of its crude oil from Iran, down from some 16.5 percent in 2009, it is believed to provide about 40% of all the refined oil used in Iran. The UN sanctions adopted this summer neither forbade purchasing Iranian oil, nor placed a ban on selling refined oil back to Iran.

India-Iranian relations go back centuries, and the US led effort to get the world on board sanctions against Iran have not been enthusiastically greeted in India, where there are both huge economic ties as well as common geopolitical interests. For instance, India and Iran have worked together in the past against the Taliban in both Afghanistan and Pakistan.

Labels: India sanctions Iran, refined oil products

posted by Carl in Jerusalem @ 12:33 PM