US sanctions Chinese company for buying Iranian oil. Beijing slams ‘bullying’ behavior

The United States has slapped sanctions on a Chinese company for importing Iranian crude in violation of US restrictions on Iran’s oil industry.

US Secretary of State Mike Pompeo said the sanctions on Zhuhai Zhenrong Limited and its chief executive Youmin Li are “part of our maximum pressure campaign” on Iran. The decision comes amid escalating tensions between the United States and Iran, and during a truce in the trade war between Washington and Beijing.

“We’ve said that we will sanction any sanctionable behavior and we mean it,” Pompeo said at a Veterans of Foreign Wars convention in Florida.

China slammed the US decision to target Zhuhai Zhenrong and its chief executive, Youmin Li, and urged the Trump administration to reverse course.

“We are opposed to the US bullying behavior of wantonly cracking down, suppressing and sanctioning Chinese companies and individuals based on US domestic law. We are firmly opposed to it and strongly condemn it,” said Hua Chunying, spokeswoman for China’s foreign ministry, at a regular press briefing in Beijing.

“We strongly urge the US to immediately rectify its wrong behavior, and stop imposing illegal sanctions against Chinese companies and individuals. China will take all necessary measures to firmly preserve the legitimate rights and interests of Chinese companies and individuals,” she added.

Zhuhai Zhenrong and Li will be barred from engaging in foreign exchange, banking or property transactions under US jurisdiction, according to American rules that govern Iranian sanctions. Any transaction involving the company’s property or assets will be prohibited in the United States, and Li will be banned from entering the country as part of the Treasury Department blacklist.

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The company’s main office in Beijing did not answer several calls from CNN Business on Tuesday.

Zhuhai Zhenrong, which was established in 1994, is one of four licensed state importers of crude oil in China. The country is one of Iran’s largest oil buyers: In 2018, China imported 29.27 million metric tons of crude from Iran, according to data from China’s Ministry of Commerce.

The company accounts for more than 60% of the China’s trade with Iran, according to its website.

The United States has sanctioned Zhuhai Zhenrong before for trading with Iran. In 2012, the Obama administration prevented the company from receiving US export licenses, financing from the US Export Import Bank, or any loans over $10 million from US financial institutions.

Back then, Zhuhai Zhenrong said it would continue to import crude from Iran, and that the sanctions would not affect it because it had little business with any US firm, according to a report by state media China News Service published at the time.

Zhuhai Zhenrong is the first Chinese oil company to face punishment since the Trump administration said in April that it would stop exempting several countries, including China, from sanctions on buying oil from Iran. Beijing pushed back against the United States shortly after that decision, saying China’s cooperation with Iran should be “respected.”

The waivers were granted last year following the reintroduction of US sanctions on Iran in November 2018. The waivers expired in May.

The United States also recently punished several foreign companies — including several Chinese aluminum producers — for helping Iran procure materials for its nuclear program.

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Tensions between Washington and Tehran have soared since Iran suspended parts of the nuclear deal that briefly brought an end to its economic and diplomatic isolation.

But Pompeo’s announcement doesn’t help matters between the United States and China, either.

The relationship between the two economic superpowers has deteriorated since a trade war kicked off last year. And even though Trump and Chinese President Xi Jinping reached a temporary trade truce last month, tariffs on hundred of billions of dollars worth of each other’s goods remain in place.

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