The US government will not impose sanctions on Japan and 10 European Union nations that have reduced their oil imports from Iran.

Ordered by Congress in December, the sanctions aim to punish countries that continue to buy oil from Iran.

China, India and South Korea, major buyers of Iranian oil, were not exempt.

Iran faces international pressure to address concerns over its nuclear enrichment programme.

´Not easy´

US Secretary of State Hillary Clinton, who announced the exemptions in a statement, said Japan and the EU nations had taken actions that were "not easy".

"They had to rethink their energy needs at a critical time for the world economy and quickly begin to find alternatives to Iranian oil which many had been reliant on for their energy needs."

The European countries that have been exempt are France, Germany, Belgium, Greece, Italy, Czech Republic, the Netherlands, Poland, Spain and the UK.

Under a US law that came into effect in 31 December, countries have until 28 June to show they have significantly reduced the amount of crude oil they purchase from Iran or face being cut off from the US financial system.

The European Union has also increased its sanctions on Iran, banning new oil contracts and phasing out existing ones from 1 July.

Shrinking markets

The move by the US administration means Japan, which is the second biggest importer or Iranian oil after China, may continue buying some oil from Iran without exposing its banks to penalties.

The law says the United States must cut off the US bank account of any foreign financial institution that completes petroleum-related transactions with Iran´s central bank, unless its country is exempt.

Japan is estimated to have cut down its purchases from Iran by 15%- 22% in the second half of last year, and is promising to do more.

"We have told the US side that the trend of decrease would accelerate and Iranian crude imports will be reduced substantially from now on," Chief Cabinet Secretary Osamu Fujimura said.

Analysts said this could put pressure on South Korea, India, China, Turkey and South Africa and other major buyers of Iranian oil to also reduce their imports in line with the US law.

Ms Clinton said the US was making progress in "shrinking Iran´s oil export markets and isolating its central bank from the world financial system". (© BBC MMXII 03/21/12)