By Meghan Gordon in Washington, with Takeo Kumagai in Tokyo
February 3, 2012 - Japanese officials renewed their case February 2 for an exemption from US sanctions on Iranian oil deals during talks in Washington between the two governments, according to Tokyo sources.
The US State Department said a Japanese delegation with officials from the country's foreign affairs, economy, trade, and finance ministries were in Washington this week to resume negotiations on how to implement sanctions against Iran.
They met with Robert Einhorn, the State Department's special adviser for non-proliferation and arms control, and Daniel Glaser, the Treasury Department's assistant secretary for terrorist financing.
"The United States and Japan reaffirm their shared interest in preventing Iran from acquiring nuclear weapons and the importance of a dual-track strategy in dealing with Iran: both pressure and engagement, to persuade Iran to address the international community's serious concerns about its nuclear program," the State Department said.
"The meetings in Washington will build upon the constructive and productive conversations held last month in Tokyo between senior officials of both governments," the State Department added.
A Treasury Department official gave no indication of the meeting's progress.
"Japan is a close partner and ally of the United States on a wide range of global issues, including the international effort to escalate pressure on Iran and further isolate the Central Bank of Iran from the international financial system," he said.
The second round of bilateral working-level talks comes two weeks after the previous discussion in Tokyo, when Japan asked the US to be flexible on the tougher regime of sanctions covering imports of Iranian crude that were signed into law December 31 by President Barack Obama.
The latest round would likely sharpen the focus on the implementation of US sanctions, covering crude imports and non-crude trade with Iran, Japanese government sources said.
The US measures, to be implemented following a warning period of several months, would block foreign institutions in breach of the new sanctions from accessing the US financial system.
However, Japan's complete exemption from the US sanctions against Iran is widely considered to be unlikely.
The focal point now is to seek exemption for Japanese financial institutions if Japan shows it has reduced imports of Iranian crude, industry sources said.
While some Japanese contracts for Iranian crude supply run from January to December, most Japanese refiners have contracts covering the April-March period, with the renewal date for the next 12-month period approaching.
Japan cannot order local refiners to reduce imports, but senior government and industry officials have said they expect to see imports from Iran, already significantly down from a few years ago, to fall further.
Japan's crude imports from Iran in 2011 dropped 11.7% year on year to 313,000 b/d, accounting for 8.8% of total crude import volumes, Ministry of Economy, Trade and Industry data showed.
Iran was the fourth-largest crude supplier to Japan in 2011.
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