US law forbids oil and gas deals with Iran

Published Mar 13, 2013 05:54pm

Iranian President Mahmoud Ahmadinejad (L) and his Pakistani counterpart Asif Ali Zardari attend the inauguration ceremony of a gas pipeline linking the two neighbours in the Iranian border city of Chah Bahar on March 11, 2013. – AFP Photo

WASHINGTON: A US law, that the State Department says can be used against Pakistan if it finalises the gas pipeline deal, forbids any major investment in Iran’s energy sector.

The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, as explained by the Congressional Research Service, requires the US president to:

Impose sanctions “if a person has, with actual knowledge, made an investment of $20 million or more that directly and significantly contributed to Iran's ability to develop its petroleum resources.”

The sanctions will also apply on “any combination of investments of at least $5 million which in the aggregate equals or exceeds $20 million in any 12-month period.”

The act also directs the US President to impose sanctions if a person has, with actual knowledge, sold, leased, or provided to Iran “any goods, services, technology, information, or support that would allow Iran to maintain or expand its domestic production of refined petroleum resources, including any assistance in refinery construction, modernisation, or repair.”

Sanctions will also apply if a person has, with actual knowledge, provided Iran with refined petroleum resources or “engaged in any activity that could contribute to Iran's ability to import refined petroleum resources, including providing shipping, insurance, or financing services for such activity.”

Sanctions established under this Act are in addition to any sanctions already imposed under the Iran Sanctions Act of 1996.

The 2010 act establishes additional sanctions prohibiting specified foreign exchange, banking, and property transactions.

The 2010 Act extended US economic sanctions placed on Iran under the Iran Sanctions Act of 1996 and punishes companies and individuals who aid Iran's petroleum sector.

It is part of a larger US campaign to target the Iranian petroleum industry with the aim to force Iran to abandon its nuclear programme. The act was passed by the House (408-8) and Senate (99-0) on June 24, 2010 and signed into law by President Barack Obama on July 1, 2010.

As the US State Department spokesperson Victoria Nuland said on Monday, the act forced the European Union and Japan to drastically reduce their dependence on Iranian oil.

“In the case of the EU, they’re now at zero. In the case of Japan, they’ve been making a steady decline, as have other countries that we have waived sanctions on,” she said,

But the Iran-Pakistan gas pipeline project, if finalised, “would take Pakistan in the wrong direction right at a time that we’re trying to work with Pakistan on better, more reliable ways to meet its energy needs.”

During the 2012 presidential campaign, Mr Obama said that the US-sponsored economic sanctions were “crippling the Iranian economy” which was now “in shambles."

In recent congressional debates, both Republican and Democratic lawmakers hoped the sanctions will soon force Iran to give up its nuclear programme.

They also claimed that the sanctions had triggered such widespread discontent in Iran that the regime could be toppled in a popular revolt.

An Israeli foreign minister document, leaked recently, reported that Iranian energy exports had fallen by 50 per cent after the European Union joined the United States last year in imposing an oil embargo on Iran.

US officials and diplomatic sources in Washington say that allowing Pakistan to finalise the pipeline deal will reduce the impact of the sanctions by allowing Iran to export its gas. That’s why, they argue, Washington is opposing the deal.

But a report posted on a popular US news site noted that the sanctions were hurting the Iranian people, not the government. The sanctions were making the Iranian currency “increasingly worthless,” the report added. The currency, Rial, has dropped 80 per cent in just the past year.

“This was making it hard for Iranians to procure medicine from overseas. The price of an imported wheelchair has increased ten-fold in just a year. The price for a cancer patient to receive chemotherapy has nearly tripled, and filters for kidney dialysis are up by 325 per cent,” said the report while urging the United States to ease the sanctions.


Do you have information you wish to share with Dawn.com? You can email our News Desk to share news tips, reports and general feedback. You can also email the Blog Desk if you have an opinion or narrative to share, or reach out to the Special Projects Desk to send us your Photos, or Videos.

More From This Section

Comments (55) (Closed)


kalbe Ali
Mar 14, 2013 01:25pm

the best thing is to stand and face the US - but on our terms things will go down in the near future but gradually improve in the long term.

Ali Asghar
Mar 14, 2013 11:24am

From the perusal of the US Law it looks that sanctions apply "if a person has, with actual knowledge, made an investment of $20 million or more that directly and significantly contributed to Iran’s ability to develop its petroleum resources.” And In its strictest sense, petroleum includes only crude oil, but in common usage it includes all liquid, gaseous, and solid hydrocarbons. Therefore the US law cannot be applicable on this deal. Above all it is a matter of PAKISTAN'S SOVEREIGNTY, and Pakistan and not the US can decide what is in our national interest.

Feroz Khan Yousufzai
Mar 14, 2013 11:20am

It's High Time that we should minimize our dependency on US. We need to go forward with this Iran Gas pipline deal as it is best for our country (Pakistan) and that is all what matters. Avoid any borrowing from US and Aid specially. It is our right to do what is best for our nation and people. Once we stop ourselves from depending on US we would be in the position to do everything on our own terms. It is about time we should shrug and neglect US requests/pleas/beggings. They do not care about (Pakistan) / Pakistani people living there and Humanity in general. They only care for their interest, so why should we.

Singh
Mar 14, 2013 01:21pm

Please run, US issuing visa today to every one.

anony
Mar 13, 2013 06:25pm
Who cares about the US law. Does Pakistani law forbid this gas pipeline deal? NO. That's all what we should be concerned about.
ali
Mar 13, 2013 06:36pm
not to mention terrorism
Saleem Khan
Mar 14, 2013 01:06pm

Pakistan has finally shown some spine against US bullying. Each country must do what is in her interest and not in the interest of the US. Ask Yankis to go jump into Atlantic or Pacific.

Salman Saifi
Mar 13, 2013 07:03pm
USA should stop spending money on making it look good in Pakistan. It is being wasted for something that'll never happen. This act of aggression for Pakistan is good enough for all to understand USA's intentions towards Pakistan. Iran is our neighbor. USA is the country that solely used Pakistan for its interests. USA should now alienate Pakistan. Its about time that USA should leave Pakistan. I for one, dream of that day to come, sooner than later.
Abdullah Hussain Sunni
Mar 13, 2013 07:07pm
Who cares. Iran Pakistan gas & oil pipeline is in Pakistan interest.
Shiraz
Mar 13, 2013 07:14pm
Oookay. Well that's US Law. US laws only apply to US Land and it's citizens.
JAVAID
Mar 13, 2013 08:38pm
the ordinary person suffers shame on the democracy of the USA
pakistan
Mar 13, 2013 09:33pm
Forget the US law..motor on with the pipeline, may be for next time, we should pass a law that states, US cannot use pakistani faciltiies untill is allows a by pass of the US law on the Iran Pakistan gas pipeline?, what is this, why are we being pressured on this, this is a life saving project for Pakistan, NO ONE has the right to comment on this, IT MUST GO ON PERIOD regardess of infrastructure costs or regardless of any laws its violating in a distant land.
Naeem
Mar 13, 2013 10:34pm
Is'nt it time that Pakistan put its own needs ahead of the USA? And what gives the "West" the sole right to nuclear technology? Sanctions? Great!! Perhaps this will kick start Pakistan's independence from foreign aid.
Pakistani
Mar 13, 2013 10:35pm
US laws dont apply to Pakistan. We are an independent country and will act in the best of OUR interests.
Stallion
Mar 13, 2013 11:00pm
Nothing but Zardari’s political play for upcoming elections. The Big Boss knows this that’s why they are silent. The dream of energy will remain a dream.
Akil Akhtar
Mar 13, 2013 11:08pm
US law applies to US citizens not anyone else but in their arrogance they think it is international law. US needs to mind its own business it ahs already caused more destruction around the world in the last 100 years than the Roman empire did in 700 years.
Bbbb
Mar 13, 2013 11:11pm
I fully agree and respect the US laws to be complied with, when in US. Same way when in Pakistan, all should respect the Pakistan laws, including Obama. Do in Pakistan, what Pakistanis do.
majid canada
Mar 13, 2013 11:16pm
This is ridiculous. iran cant have nuclear but other countries in the same region like israel can have hundreds of nuclear warheads and no problem and americans keepon asking the the question why islamic countries hate them.
Ali Hussain
Mar 13, 2013 11:17pm
Why are Pakistanis so obsessed about sanctions. Weren't we under sanctions before. We came out stronger!
Baber
Mar 13, 2013 11:17pm
Way to go American Government. Now people in Pakistan will have more reasons to hate you.
Shah
Mar 13, 2013 11:27pm
US law is for US citizens. People in Pakistan elect their own representatives to make law for them. US law is as much binding to a Pakistani citizen in Pakistan as Pakistani law is to an American citizen in US. Is this really that hard for Washington DC to understand?
pathanoo
Mar 14, 2013 01:05am
Pakistan has every right to do the Iranian pipe line deal. America has every right to impose sanctions on Pakistan and reduce/eliminate aid.
Sue Sturgess
Mar 14, 2013 01:13am
US law applies to US citizens and to people residing in or visiting USA. US legislation cannot forbid Pakistani actions. It can however, impose economic sanctions, and withdraw financial aid and foreign investment, as can other countries, in an effort to "persuade" Pakistan to go along with their wishes.
uswan
Mar 14, 2013 01:35am
As if we Pakistani should care
umesh bhagwat
Mar 14, 2013 01:55am

the us is living in a fool's paradise!

Manzoor
Mar 14, 2013 02:48am
It is Iran and Pakistan, why are we discussing US law !
Morad786
Mar 14, 2013 03:45am
We need to move ahead...no matter what... The sanctions and reduction in Aid is acceptable as this will create jobs and make the ordinary mans life more fulfilling!
Kamran
Mar 14, 2013 03:59am
I think gas does not come under "petroleum resources". This is technical. Gas sale will just 'ease' restrictions on sale of "petroleum resources".
haris
Mar 14, 2013 10:39am

Impose sanctions “if a person has, with actual knowledge, made an investment of $20 million or more that directly and significantly contributed to Iran’s ability to develop its petroleum resources.”

Well as an ordinary person with little or no knowledge of these financial regulations, I see Pakistan hasn't invested a penny in Iran. In fact, Pakistan is importing only Gas from there. Are these sanctions have anything to do with Pakistan? Just question

Faisal
Mar 14, 2013 10:43am

Americans have a dirty habit of poking their nose in every country. We should move on with the deal (remembering to make the price more economical for the people of pakistan) and join hands with China, Iran, and other strong muslim countries The USA will scratch its head

Immad
Mar 14, 2013 10:17am

India and Pakistan both conceived this project in light of their energy requirement. US helped India thorugh civil nuclear deal. For Pakistan they have just threats!

bharart
Mar 14, 2013 10:21am

never has But if you do the wrong thing by US law standards, then a US company is banned from dealing with you. Try working in this world without some reasonable cooperation from the USA

bharart
Mar 14, 2013 10:22am

Are you sure that Pakistan would do well without aid?

Awais
Mar 14, 2013 04:45am
New World Order is here
Nadeem
Mar 14, 2013 05:14am
Since when did US law become applicable to the rest of the world ?
M H I Khan
Mar 14, 2013 07:31am

I do not understand this Law and I wanted to know why these Laws were made. Every country has a right to build and strengthen its Defense abilities. Why no such sanctions were imposed when Israel refused to sign the NPT and why when genocide and atrocities were inflicted on the Ghazians in Palestine and why are they allowed to posses Weapons of mass destruction and bombs etc, there is a long list which the world dares to raise any objections. People of Pakistan has gone through a lot pressure and are suffering because of the increased Insurgency, militancy and also due to other various political reasons, thanks to USA and their allies. My humble request is please allow and adopt the policy of " Grow and Let Grow" This deal with Iran will help eliviate the country's economy and bring some relief to the poor people of Pakistan who is going through very tough times ever since its independence.

Tajmeer Khan
Mar 14, 2013 08:20am
why US law only apply always on Pakistan. Why this cant be apply on other countries in the world. Pakistan is sovereign state in the world but why we still need approval of US for doing something with other countries.
khan
Mar 14, 2013 08:30am

As the threat of imposing sanctions on Pakistan are from US Congress and US Law, since we Pakistanis are so much dependent on thier so called aid, with due respect the credit goes to our Government and to our politicians for mass corruption and mis management of funds and resources which has brought our land to such a deplorable state.

sdf
Mar 14, 2013 09:30am

Perhaps the headline should have been different. If we read past the headline it becomes clear that the law does not (and obviously can not) literally forbid other countries from anything. It forbids their President (in a way) from dealing with countries that deal with Iran.

bauke
Mar 14, 2013 09:39am

since a very, very long time, but nobody cares as long as the slave 'earns' his daily bread.

bauke
Mar 14, 2013 01:54pm

Pakistan is not a sovereign state in relation to USA, just like any other state in the world, except maybe China.

Arif A.Khan
Mar 14, 2013 02:23pm
Can the US Govt tell how much Iranian Oil is imported by India, China, Korea & other far east countries on regular basis,why this Act or any other Act was not imposed on those Countries? can they tell the World what actions were taken against India when it refused to "slow down" its imports of Oil from Iran last year? above all, can US tell that how will it pull back from Afghanistan if Sanctions were imposed against Pakistan? we all know it will take over one and a half year to complete this project of National interest and by that time the World would have changed, we do not have solution to our energy crisis and this pipe line is not only vital but a must and anyway its being built now, US can not impose sanctions because it will loose completely in South West Asia, they are daggers drawn with Iran, India accommodates them within limits, so what about Imperialistic hegemony the US dreams, what about their plans of access to the CIS wealth of fossil fuel? By constructing this pipeline Pakistan is not, in any way, investing in Iranian economy, don't the US know that Iran is providing $500 million and technology for this project in form of materials & services, don't they know that Pakistan is involved within its boundary and not beyond, don't they know that the Gas will start flowing in this pipeline when it is completed, don't they know that the Iranian investment shall be returned by Pakistan not in currency but in goods such as Wheat & foodstuff which does not come under sanctions any where in this World? Its high time that Sanctions hype should be stopped, Pakistan's weakest Government ever has taken this bold step and the whole Nation stands behind it for this project and every one knows that once Pakistanis stand up then nothing can break us.
Shahpur
Mar 14, 2013 02:43pm
Iran, Pakistan and Afghanistan is a Natural and Logical alliance. Someday it will become real.
AD
Mar 14, 2013 02:54pm
Current Pakistan's behavior towards US is for its own interest - not for charity or bullying....
farid
Mar 14, 2013 03:30pm
One day in lion's life is better than 100 years in a jackal's life. (Tippu Sultan) Pakistan has the choice to be a lion or a jackal.
Marshall
Mar 14, 2013 03:55pm
US and European countries pressure on sanction on Iran and North Korea where another term of control resources and way of killing humanity of country. Some countries dislike how a person rule in content doesn't mean rights to get own citizens in revolution against own leader.
Indian
Mar 14, 2013 04:26pm
Whole Muslim World even together can't face the America.
chait
Mar 14, 2013 04:48pm
Because you took their dollar and accepted their slavery.
bauke
Mar 14, 2013 05:42pm
Maybe the best of 'OUR interest' is being decided and governed by the US....?
Satyameva Jayate
Mar 14, 2013 05:43pm
It only affects those who survive on the US aid or trade.
Ahsan.
Mar 14, 2013 07:12pm
Lets make it simple, if someone outside of family help them out then family become grateful for there life. Even sometime willing to sacrifice there life (unwilling marriage). Similar things is applicable here as well a country whether you like it or not has given us 20 billion since 2001 in different capacity has a right to expect us behaving in there pleasing way as the money which US is giving Pakistan is there Tax payer money. Secondly servants doesn't have the choice. They do as there master told them to do. As far is project technicality is concern $11 MMBTU which is at the moment $5 MMBTU poor country such as out could not afford to pay this bill with annual income of $660.00 per year . Countries like Japan who does not have any option buy such expensive gas. We do have such option, extract maximum internal potential of oil and gas look for coal fired power plant , build dams to extract hydral Electricity, electric theft improve efficiency of current grid.then if we are shot of energy which will mean we are seriously industrial country import LNG, gas pipeline will all become feasible. I am sure everyone of us is aware of the penalties in this project if we did not fulfill our part. I think this is political point scoring by PPP .......that we are anti america these things sells well in our beloved land of pure ........ and will not benefit at all.....
Tariq
Mar 14, 2013 08:13pm
Yes, because they're not united!
Tariq
Mar 14, 2013 08:25pm
Sanctions will just hurt the establishment and the politicians! It will not hurt the ordinary man as he has already hit the very bottom, and cannot get any worse!
Ray
Mar 14, 2013 10:14pm
In order to achieve peace in South West Asia, Pakistan need to have good neighbors who could help each others instead of relying on friends living far across the ocean.
Cyrus Howell
Mar 15, 2013 12:05pm
Agree. What Washington is saying here is different than what it will do. The state department cannot publicly lose face. The poor family does the shopping because the rich folks do not want to leave the house to be kidnapped or robbed.