Thursday, April 29, 2010

US Sanctions Regime Wavers (sic)

The White House has reportedly called on Congress to provide waivers in the Iran sanction bill that would allow Chinese and Russian companies to do business with Iran.

The Obama administration is pressing Congress to provide an exemption from sanctions against Iran for certain companies of "cooperating countries," Fox News reported on April 29.

Congressmen believe the decision is aimed at relieving concerns about possible penalties for Chinese and Russian companies and garnering Moscow and Beijing's support for a fourth round of sanctions against Iran in the UN Security Council.

On this same day . . .

Italy's Eni says it will not extend its contracts to develop an Iranian oil field as it may lead to US sanctions against the oil firm.

State-controlled Eni, Italy's biggest oil and gas company, signed contracts in 2001 with the Iranian government to develop Darkhovin oil field.

In an annual report filed with the US Securities and Exchange Commission, Eni said it would not extend its contracts for the third phase of the project because of the government pressures and fear of US sanctions against the company, Reuters reported.

"Our activities in Iran could lead to sanctions under relevant US legislation," the report said.

"Specifically, activities are progressing to hand over operatorship of the Darkhovin oilfield to the local partners as development activities were concluded at this field in 2009."

Eni's Chief Executive Paolo Scaroni also said on Thursday that the company intends to sell off its shares in the oil field.

Italy has been one of Iran's major European partners and Eni has been doing business with Iran since 1957. However, Italy's close ties with Israel and the US, which is pushing for a fourth round of sanctions against Iran in the UN Security Council, have reduced Rome's commercial dealings with the Islamic Republic.

Italian Foreign Minister Franco Frattini had earlier said that Rome has suspended export credit guarantees for firms investing in Iran, adding that Italy intends to block new investments in Iranian oil and gas industry.

Under the US Iran Sanction Act, sanctions might be imposed on any person or company that invests more than $20 million a year in Iran's energy sector.

So this is how the deal appears to be shaking out: the closer US ally, Italy, must take an economic hit while the nominal "bad guys," China and Russia get exemptions from the sanctions that the US is trying to rig against Iran.

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