Japan yesterday slapped additional sanctions on Iran over its disputed nuclear program, following the US and the EU in pressuring Tehran despite Tokyo’s reliance on oil imports from the country.
The sanctions that go beyond requirements in a prior UN Security Council resolution include restrictions on doing business with 15 Iranian banks that could contribute to nuclear activities and a halt to new energy-related investments in Iran.
But resource-poor Japan did not impose any restrictions on oil from the country, which accounts for 10 percent of its crude imports, making it the fourth-biggest supplier after Saudi Arabia, the United Arab Emirates and Qatar.
“We took those steps as they are necessary to push for nuclear non-proliferation and prevent its nuclear development,” Japanese Chief Cabinet Secretary Yoshito Sengoku told a news conference.
“We have traditionally close relations with Iran and from that standpoint, we will patiently encourage the country towards a peaceful and diplomatic solution,” he said.
While the two countries have traditionally enjoyed relatively friendly ties, Tokyo has been urging Tehran to respond to global calls to suspend nuclear enrichment activities and return to the negotiating table.
The US and other Western powers fear Iran’s nuclear work is aimed at bomb-making, a charge Tehran denies.
Back in 2006, when tension was growing between the US and Iran over the country’s uranium processing and nuclear power development, oil developer Inpex Corp cut its stake in the Azadegan oil field project to 10 percent from 75 percent.
Japanese Trade Minister Masayuki Naoshima said yesterday that no major change was expected with Inpex’s investment, currently Japan’s sole energy-related stake in Iran.
An Inpex spokesman said it considered its shareholding in Azadegan as an existing contract and not affected by the latest sanctions.
Oil traders said that while it was widely expected Japan would not halt imports, it was not certain how the sanctions on banks — which call for a freezing of assets held by the Iranian lenders in Japanese accounts — would affect their business.
Japan’s top bank, Mitsubishi UFJ Financial Group, and its third-largest, Sumitomo Mitsui Financial Group, said that some of the 15 Iranian banks were among their customers and that they would act in compliance with the law.
“One thing yet to be clear is whether settlements of our transactions will be done as usual. That would be up to banks,” said one Tokyo-based trader who has Iranian oil contracts.
Among other sanctions, Japan said it would effectively ban new energy-related investment by not providing medium to long-term export credit commitments for trade with Iran.
It also prohibits the provision of insurance and reinsurance services to Iran and doubles the number of companies to 88 on a blacklist subjecting them to a freezing of assets. The number of individuals on the list was boosted to 24.
Japan approved sanctions against Iran last month in line with the UN Security Council Resolution 1929, but US officials have urged Tokyo to follow the EU in adopting tougher sanctions, especially in the financial sector.
The steps announced yesterday were also based on Resolution 1929, but not explicitly required by it.