China opposes Iran-based US sanctions on CNPC's Bank of Kunlun
Singapore (Platts)--1Aug2012/412 am EDT/812 GMT
China has announced its opposition to US sanctions imposed on the
Bank of Kunlun, owned by China National Petroleum Corp, for doing
business with Iranian banks.
In a statement on the website of the Chinese consulate in New York on
Wednesday, Foreign Ministry spokesman Qin Gang urged the US to
immediately revoke the sanctions and stop implementing measures that
will hurt China-US relations.
"The Chinese side expresses its strong dissatisfaction and resolute
opposition, and will take the matter up with the US in Beijing and
Washington."
The US Treasury Department on Tuesday imposed sanctions on the Bank of
Kunlun and Elaf Islamic Bank in Iraq "for knowingly facilitating
significant transactions or providing significant financial services to
Iranian banks designated for their connection to Iran's support for
terrorism or proliferation."
The move came on top of new US sanctions imposed by President Barack
Obama on Iran, designed to deter Tehran and other countries from
establishing payment mechanisms for the purchase of Iranian crude that
circumvent existing sanctions.
The Bank of Kunlun is a regional bank in western Xinjiang province. It
is 82% held by CNPC while other Xinjiang entities own the remainder.
When contacted Wednesday, a spokesman at CNPC said he was unaware of the
matter and declined further comment. There was no response to an email
query to the bank sent Wednesday.
In its 2011 annual report, the bank said its overall strategy is to
serve China's energy security needs and contribute to the country's
western development. Its business is underpinned largely by petroleum in
Xinjiang and it serves mainly state-owned and other oil and
petrochemical enterprises.
Its cross-border transactions totaled over $60 billion last year.
Qin added in the statement that China and Iran have normal bilateral
relations, and have carried out open and transparent business
cooperation in energy and trade that had nothing to do with Iran's
nuclear program.
Despite receiving an exemption from US sanctions in late June for having
significantly reduced its buying from Iran, China's actual imports of
Iranian crude oil during the month were near year-ago levels, at over
630,000 b/d, customs data showed July 24.
All of China's crude buying is undertaken by CNPC rival Sinopec, and
state trader Zhuhai Zhenrong. CNPC was reported to have pulled out of
the $5 billion South Pars project in Iran after dragging its feet on
development work despite several ultimatums, the semi-official Mehr news
agency said July 29.
"[China's trade with Iran] does not violate any United Nations' Security
Council resolutions and other international guidelines. China's position
on non-proliferation is consistent and clear and together with relevant
parties, including the US, will actively work to promote a resolution to
the Iranian nuclear issue," Qin said.
"But the US has ignored China's concerns and has again imposed sanctions
on Chinese businesses and banks. This will negatively impact US-China
bilateral cooperation," the statement added.
--Song Yen Ling,
yen_ling_song@platts.com
--Edited by Haripriya Banerjee,
haripriya_banerjee@platts.com
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