“The Obama administration issued SREs to 20 countries multiple times between 2012 and 2015. We will have issued, if our negotiations are completed, eight and have made it clear that they are temporary. Not only did we decide to grant many fewer exemptions, but we demanded much more serious concessions from these jurisdictions before agreeing to allow them to temporarily continue to import Iranian crude oil,” US Secretary of State Mark Pompeo said at a press conference on October 2.
“Countries may be allowed to sell humanitarian goods like food and medicines and some other non-sanctioned items. The details are not yet clear. Exports to Iran may face intense US scrutiny,” the official said.
Since there are banking restrictions in place for trading with Iran, nations sourcing oil from the country like India are expected to pay in their local currencies in an account in the national bank of the importing country.
India and Iran already had such a rupee payment arrangement in place during the previous period of economic sanctions to pay for oil which was never terminated but has to be re-activated.
Last time the arrangement was that India will pay for 45 per cent of its oil purchase in rupee and the rest in euros. The rupee payments would be deposited in an account with the UCO Bank, which would then be used by Iran to purchase Indian goods.
“This time the banking channel restrictions are also more stringent making payments in euros more difficult so there is no decision yet on the percentage of trade that is to be done in the rupee. The talks with the Iranians on the matter continue,” the official said.
Source: The Hindu Business Line