US exempts India, but not China, from Iran sanctions

US: The United States said Monday it would exempt seven emerging economies including India from tough new sanctions after they cut back on oil from Iran, but the punishment still loomed for China. Secretary of State Hillary Clinton added India, Malaysia, South Africa, South Korea, Sri Lanka, Turkey and Taiwan to the list of those exempt from the sanctions. In March, she made exemptions for European Union nations and Japan.

The decision was announced two days before Clinton meets Indian officials for annual talks. The move resolves one of the biggest points of tension in years in the growing relationship between the world's two largest democracies. Under a law approved last year that irritated some US allies, the United States starting on June 28 will penalize foreign financial institutions over transactions with Iran's central bank, which handles sales of the country's key export.

Clinton said the seven economies exempted on Monday have all "significantly" reduced crude oil purchases from Iran. She cast the exemptions as proof of success in the US campaign to put pressure on Iran's clerical regime, which Israel and some Western officials fear is seeking a nuclear bomb.

"By reducing Iran's oil sales, we are sending a decisive message to Iran's leaders: until they take concrete actions to satisfy the concerns of the international community, they will continue to face increasing isolation and pressure," Clinton said in a statement.

However, the United States did not announce an exemption for China -- which is heavily dependent on oil from Iran and elsewhere to power its giant economy. Officials said that the United States remained in talks with Beijing. "We have informed our Chinese colleagues fully about the scope and urgency" of the sanctions, a senior US official told reporters on condition of anonymity.

But the official said that China -- one of six nations in talks with Iran that resume next week in Moscow -- was a "very important partner" on the nuclear row. AFP