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23 March 2012 - 21:46

Under pressure from Asian oil importers, the European Union (EU) has agreed to provide some insurance on Iranian oil shipments before the full implementation of the bloc’s sanctions against Iran.

The decision, reached on Thursday and expected to be formally approved by EU foreign ministers on Friday, should make it easier for the likes of Japan and South Korea to import Iranian crude at least until the deadline, Reuters quoted EU diplomats as saying.

The European Union approved new sanctions on Iran's oil and financial sectors on January 23 which aim to prevent member states from buying Iranian crude or doing business with its central bank. The sanctions will be fully enforced as of July 1.

As well as stopping EU states from importing Iranian crude, the embargo banned European companies from transporting, purchasing or insuring crude and fuel originating in Iran and intended for anywhere in the world.

Thursday's deal will allow buyers outside the EU to purchase third-party and environmental insurance on their shipments from European insurers, who cover most of the world's tanker fleet. "Certain insurance is allowed until July 1," an EU diplomat said.

On March 16, an unnamed South Korean government source told Reuters that Japanese and South Korean insurers are trying to persuade the European Union to reconsider its sanctions against Iran so that Europe’s insurance market can proceed with covering Iranian oil shipment to Asia.

"We argue that this regulation [EU sanctions] applies too broadly as it also hits non-European companies. Not only South Korea but also Japan, China and others face the same situation," the source added.

The EU agreement comes just two days after the US State Department announced that it would exempt 10 European countries and Japan from penalties for doing business with Iran's central bank, saying these countries have reduced their oil purchase from Tehran.

The US, Israel and some of their allies have accused Tehran of pursuing military objectives in its nuclear energy program. Washington and the EU have even used this pretext to impose sanctions against Iran.

The Islamic Republic has repeatedly refuted the Western allegations regarding its nuclear energy program, arguing that as a signatory to the nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it is entitled to develop and acquire nuclear technology for peaceful purposes.

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News ID 181628