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Fresh U.S. sanctions to trap more Iran oil revenue

Dec 20 2012 Reuters

A little-noticed provision in U.S. sanctions against Iran beginning in February is likely to trap payments abroad for its oil exports running into billions of dollars, sapping Tehran of revenue needed to fund the government. A provision of the law U.S. President Barack Obama signed last summer, which goes into effect on Feb. 6, states that funds being used to pay for oil must remain in a bank account in the purchasing country and can be used only for non-sanctioned, bilateral trade between that country and Iran. Any bank that repatriates the money or transfers it to a third country faces a sanction risk. This could halt most of the flow of petrodollars to Iran, given that the value of its oil exports is far higher than what it imports from its biggest customers - China, South Korea, India and Japan. Sanctions on financial transactions with Iran have already made it difficult for buyers to pay for oil from the OPEC producer. South Korea is stuck with close to

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