Japan's Additional Sanctions on Iran's Energy, Financial Sectors

Japan slapped additional sanctions on Iran over its disputed nuclear program on Friday (3 September 2010), following the United States in pressuring Tehran despite Tokyo's reliance on oil imports from the country. The measures that go beyond requirements in the UN Security Council resolution include restrictions such as banning financial activity with 15 designated Iranian banks that could contribute to nuclear activities -- a step that could affect some Japanese major banks.

Japan also said it is suspending new oil and gas investments in Iran and freezing the assets of 88 organizations and 24 individuals in its latest round of sanctions for the Middle Eastern country’s nuclear program. "We’ve decided to add more sanctions to prevent nuclear proliferation and development," Chief Cabinet Secretary Yoshito Sengoku told reporters on 3 September 2010 in Tokyo. "It’s important for the international community to unify pressure on Iran to make a wise decision while keeping open the window for dialogue."

Japan's new sanctions halt new energy-related investment by not allowing medium to long-term export credit commitments for trade with Iran. But the government did not impose any restrictions on oil imports from Iran -- Japan's No. 4 crude supplier after Saudi Arabia, United Arab Emirates and Qatar. Its crude oil imports from Iran accounted for 95% of the total US$10.3 billion in imports from the Islamic republic last year.

In 2009, Japan got some 10% of its crude oil from Iran, importing about 421,000 bpd. "We took those steps as they are necessary to push for nuclear non-proliferation and prevent its nuclear development," 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 added.

The Japanese government's additional sanctions against Iran, however, are not expected to affect the 10% stake that Inpex Corporation holds in the Azadegan Oil Field project, Japan's Trade Minister said on 3 September 2010. "There is no big change expected to Inpex's stake in the Azadegan Oil Field," Masayuki Naoshima, the Minister of Economy, Trade and Industry, told reporters.

The United Nations in June passed a fourth round of restrictions against Iran for refusing to suspend its enrichment of uranium. The Obama administration two weeks ago concluded talks with eight countries including Japan about ways to strengthen financial sanctions against Iran. Catherine Ashton, the European Union’s high commissioner in charge of foreign affairs, urged China yesterday to help make a new round of EU sanctions on Iran effective. - Reuters, Bloomberg, Trade Arabia, Fars