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U.S. slaps sanctions on China state energy trader over Iran | Reuters
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(Reuters) - The United States on Thursday imposed sanctions on China's state-run Zhuhai Zhenrong Corp, which it said was Iran's largest supplier of refined petroleum products, as it sought to impress on Beijing and Tehran its resolve to increase economic pressure over Iran's nuclear program.
Secretary of State Hillary Clinton also imposed
sanctions on Singapore's Kuo Oil Pte Ltd and FAL
Oil Company Ltd, an independent energy trader
based in the United Arab Emirates, the State
Department said in a notice.
The State Department said the move was part of
a broadening international effort to target Iran's
energy sector and persuade Tehran to rein in its
nuclear ambitions.
"The sanctions announced today are an
important step toward that goal, as they target
the individual companies that help Iran evade
these efforts," the statement said.
The sanction bar all three companies from
receiving U.S. export licenses, U.S. Export Import
Bank financing or loans over $10 million from
U.S. financial institutions, the department said,
stressing that the sanctions apply only to the
companies and not to their governments or
countries.
The U.S. announced the decision after China's
rebuff this week of Treasury Secretary Timothy
Geithner, who traveled to Beijing to press China
on U.S. demands it do more to help curb Iran's
oil revenues.
.
'SHOT ACROSS THE BOW'
Analysts said the U.S. move was largely symbolic, given that Zhenrong was unlikely to
have much U.S. business exposure, but that it did
send a signal to Beijing and its state-run oil giants such as China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec
Corp) and China National Offshore Oil Corp..
These companies have invested billions of dollars
in the U.S. energy sector, and are much more exposed to the impact of potential sanctions.
"It's a good shot across the bow and signals the
U.S. is serious about vigorous sanctions
enforcement. This could be the beginning of a
cascade of more sanctions on Chines companies
if China doesn't curtail its Iranian trade," said Mark Dubowitz, executive director of the Foundation
for Defense of Democracies, a Washington
pressure group that favors stronger sanctions on
Iran.
Zhuhai Zhenrong - one of four dominant Chinese state oil traders - brokered the delivery of over
$500 million in gasoline to Iran between July 2010 and January 2011 in contravention of U.S. sanctions law, the State Department said.
While the U.S. move targeted Zhenrong for its
gasoline sales, the Chinese company has a
broader role in Beijing's energy dealings with Iran and has been a major buyer of Iranian oil since at least 1995, typically selling the oil to Sinopec and
PetroChina, the country's two dominant refiners.
Zhenrong has been buying about 240,000 barrels per day for several years, representing about 5 percent of China's imports, although sources said last week it would cut crude imports from Iran
for a second month in February along with other
Chinese oil traders amid a dispute over
payments.
In mid-2010, Zhenrong joined Chinese state
energy giants in filling a void left by Western oil
companies and trading houses that had halted
sales of gasoline to Iran because of toughening
U.S. sanctions.
Derek Scissors, an expert in the Chinese economy
at the Heritage Foundation think tank, said the
action against Zhenrong would send a message
to other Chinese state oil majors.
"We don't want to be taking action against
Sinopec, CNPC and CNOOC. They are huge, and politically powerful," he said.
"But Zhenrong is close enough to them, and won't really do that much harm beyond sending the signal."
.
TARGETING COMPANIES
The U.S announcement followed Western moves to tighten the economic noose on Tehran through unilateral sanctions.
President Barack Obama has signed a U.S. law imposing sanctions on financial institutions that deal with Iran's central bank, its main clearinghouse for oil exports, while the European Union is expected soon to agree to a new ban on Iranian oil imports.
Washington has sought to impress on friends and foes that it means business, sending U.S. officials around the world to warn of the dangers of dealing with Iran.
A senior Obama administration official stressed that the purpose of sanctions was to draw Iran back to th negotiating table to discuss curbing its nuclear ambitions, the other half of the 'two-track' U.S. policy of pressure and engagement.
"The theory of the case here is that these two tracks will ultimately converge and Iran will make a decision that it is important to come to the table to try to remove some of these sanctions, to improve their economy," the official told reporters on condition of anonymity.
The other two companies listed by the State Department, both well-known names in the Asian oil trading world, are smaller, private trading firms that typically specialize in shipping bunker fuel or heavy residual products but, like Zhenrong, had also begun doing deals to sell gasoline to Iran.
The State Department said Kuo Oil had provided over $25 million in refined petroleum to Iran between late 2010 and early 2011, while FAL
provided over $70 million in refined petroleum to
Iran over multiple shipments in late 2010.
In all cases, individual deliveries were worth
significantly more than the $1 million threshold
under U.S. law and the total value of the
transactions was well above the $5 million
threshold for sanctionable activities within a 12-
month period, the State Department said.
.
.
.
(Reuters) - The United States on Thursday imposed sanctions on China's state-run Zhuhai Zhenrong Corp, which it said was Iran's largest supplier of refined petroleum products, as it sought to impress on Beijing and Tehran its resolve to increase economic pressure over Iran's nuclear program.
Secretary of State Hillary Clinton also imposed
sanctions on Singapore's Kuo Oil Pte Ltd and FAL
Oil Company Ltd, an independent energy trader
based in the United Arab Emirates, the State
Department said in a notice.
The State Department said the move was part of
a broadening international effort to target Iran's
energy sector and persuade Tehran to rein in its
nuclear ambitions.
"The sanctions announced today are an
important step toward that goal, as they target
the individual companies that help Iran evade
these efforts," the statement said.
The sanction bar all three companies from
receiving U.S. export licenses, U.S. Export Import
Bank financing or loans over $10 million from
U.S. financial institutions, the department said,
stressing that the sanctions apply only to the
companies and not to their governments or
countries.
The U.S. announced the decision after China's
rebuff this week of Treasury Secretary Timothy
Geithner, who traveled to Beijing to press China
on U.S. demands it do more to help curb Iran's
oil revenues.
.
'SHOT ACROSS THE BOW'
Analysts said the U.S. move was largely symbolic, given that Zhenrong was unlikely to
have much U.S. business exposure, but that it did
send a signal to Beijing and its state-run oil giants such as China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec
Corp) and China National Offshore Oil Corp..
These companies have invested billions of dollars
in the U.S. energy sector, and are much more exposed to the impact of potential sanctions.
"It's a good shot across the bow and signals the
U.S. is serious about vigorous sanctions
enforcement. This could be the beginning of a
cascade of more sanctions on Chines companies
if China doesn't curtail its Iranian trade," said Mark Dubowitz, executive director of the Foundation
for Defense of Democracies, a Washington
pressure group that favors stronger sanctions on
Iran.
Zhuhai Zhenrong - one of four dominant Chinese state oil traders - brokered the delivery of over
$500 million in gasoline to Iran between July 2010 and January 2011 in contravention of U.S. sanctions law, the State Department said.
While the U.S. move targeted Zhenrong for its
gasoline sales, the Chinese company has a
broader role in Beijing's energy dealings with Iran and has been a major buyer of Iranian oil since at least 1995, typically selling the oil to Sinopec and
PetroChina, the country's two dominant refiners.
Zhenrong has been buying about 240,000 barrels per day for several years, representing about 5 percent of China's imports, although sources said last week it would cut crude imports from Iran
for a second month in February along with other
Chinese oil traders amid a dispute over
payments.
In mid-2010, Zhenrong joined Chinese state
energy giants in filling a void left by Western oil
companies and trading houses that had halted
sales of gasoline to Iran because of toughening
U.S. sanctions.
Derek Scissors, an expert in the Chinese economy
at the Heritage Foundation think tank, said the
action against Zhenrong would send a message
to other Chinese state oil majors.
"We don't want to be taking action against
Sinopec, CNPC and CNOOC. They are huge, and politically powerful," he said.
"But Zhenrong is close enough to them, and won't really do that much harm beyond sending the signal."
.
TARGETING COMPANIES
The U.S announcement followed Western moves to tighten the economic noose on Tehran through unilateral sanctions.
President Barack Obama has signed a U.S. law imposing sanctions on financial institutions that deal with Iran's central bank, its main clearinghouse for oil exports, while the European Union is expected soon to agree to a new ban on Iranian oil imports.
Washington has sought to impress on friends and foes that it means business, sending U.S. officials around the world to warn of the dangers of dealing with Iran.
A senior Obama administration official stressed that the purpose of sanctions was to draw Iran back to th negotiating table to discuss curbing its nuclear ambitions, the other half of the 'two-track' U.S. policy of pressure and engagement.
"The theory of the case here is that these two tracks will ultimately converge and Iran will make a decision that it is important to come to the table to try to remove some of these sanctions, to improve their economy," the official told reporters on condition of anonymity.
The other two companies listed by the State Department, both well-known names in the Asian oil trading world, are smaller, private trading firms that typically specialize in shipping bunker fuel or heavy residual products but, like Zhenrong, had also begun doing deals to sell gasoline to Iran.
The State Department said Kuo Oil had provided over $25 million in refined petroleum to Iran between late 2010 and early 2011, while FAL
provided over $70 million in refined petroleum to
Iran over multiple shipments in late 2010.
In all cases, individual deliveries were worth
significantly more than the $1 million threshold
under U.S. law and the total value of the
transactions was well above the $5 million
threshold for sanctionable activities within a 12-
month period, the State Department said.
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