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S. Korea faces 18-percent Iranian oil cut guideline: sources

All Headlines 04:16 February 03, 2012

By Lee Chi-dong

WASHINGTON, Feb. 2 (Yonhap) -- South Korea will be forced to slash its oil imports from Iran by at least 18 percent if the U.S. Treasury Department accepts lawmakers' guidelines on implementing a new Iran sanctions law mainly aimed at curbing its oil sales, sources here said Thursday.

The U.S. has been calling for international cooperation in implementing the 2012 National Defense Authorized Act.

"Some senators requested a 18-percent cut for a foreign country to be eligible for the waiver of sanctions on its financial institutions," an informed source said on the condition of anonymity.

Sens. Bob Menendez (D-N.J.) and Mark Kirk (R-Ill.), who sponsored the law, made the suggestion in a recent letter to Treasury Secretary Timothy Geithner.

Their request is not binding and it is uncertain whether the department will accept it.

But it is the first known concrete guideline for the implementation of the act, designed to deprive Iran of financial resources for its suspected nuclear weapons development.

The legislation calls for sanctions on domestic and foreign financial institutions that do business with Iran’s central bank. It allows the government to waive sanctions against foreign financial institutions if their nations have “significantly reduced” the volume of crude oil purchases from Iran.

"We are all engaged, it's an international effort ... trying to deter them from their nuclear ambitions. That's the most important thing," Geithner said.

South Korea expressed its intent to join Washington's move against Teheran but it faces a dilemma between political ties with Washington and economic fallout.

Last year, South Korea imported 9.8 percent of its crude oil from Iran, which amounted to 12.42 million tons. The fourth-largest Asian economy depends entirely on imports for its oil demand.

South Korea and the U.S. are in consultation over the amount of Iran-produced oil imports Seoul will reduce, according to the source.

Robert Einhorn, the U.S. State Department's special adviser for nonproliferation and arms control, visited Seoul in mid-January to discuss the issue.

The two sides plan to hold a follow-up meeting in Washington later this month, said the source.



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