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U.S. exempts Chabahar port-related activities from its sanctions

A cargo ship is docked during the inauguration ceremony of the newly built extension in the port of Chabahar on the Gulf of Oman, southeastern Iran, near the Pakistani border on December 3, 2017.

A cargo ship is docked during the inauguration ceremony of the newly built extension in the port of Chabahar on the Gulf of Oman, southeastern Iran, near the Pakistani border on December 3, 2017.   | Photo Credit: AP

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Activities related to the development of the Chabahar port in Iran will be exempt from U.S sanctions that kicked in on Monday, following the 180 day cool-off period after the U.S. withdrew from the Joint Comprehensive Plan of Action (JCPOA or “Iran Deal”) in May this year.

This waiver will bring some measure of relief to India, which had been discussing a sanctions exemption for Chabahar having signed an agreement with Iran and Afghanistan in May 2016 for the port’s development. India has committed $500 million to the project and $2 billion to build a railway line from Chabahar to Hajigaj in Afghanistan.

“After extensive consideration, the secretary has provided for an exception from the imposition of certain sanctions under the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) with respect to the development of Chabahar Port and the construction of an associated railway and for the shipment of non-sanctionable goods through the port for Afghanistan’s use, as well as Afghanistan’s continued imports of Iranian petroleum products,” a State Department spokesperson said on background. The news agency, Reuters, was the first to report the story.

The IFCA was one of the laws under which sanctions on Iran were earlier imposed by former U.S. President Barack Obama, with implications for non-US companies working with Iran in various sectors including shipping, shipbuilding, energy and insurance.

Representatives of India, Afghanistan and Iran met a little more than two weeks ago in New Delhi, despite looming U.S. sanctions, to discuss operationalization of the port, which is seen as key to connect India and Afghanistan to Iran and Central Asia, bypassing Pakistan.

The U.S. spokesperson said that President Donald Trump’s South Asia strategy was focused on economic growth for Afghanistan and a “close partnernship” with India and the U.S seeks to maintain a close relationship with both countries as they pursue a “policy of maximum pressure” against Iran.

India was, on Monday, among eight countries that received a temporary waiver on U.S sanctions with regard to Iranian oil imports.

The Hindu has reached out to the Indian Embassy in Washington DC, for a reaction.