Administration grants exemptions on Iran sanctions

March 14, 2012: Iranian President Mahmoud Ahmadinejad speaks in Tehran. (AP)

The United States is offering some breathing room in its seemingly ironclad set of sanctions against Iran, underscoring the difficulty the U.S. and other countries may have in truly freezing out the Iranian regime.

The State Department on Tuesday announced exemptions for 11 countries from the newly passed economic sanctions expected to hit Iran's financial and energy sectors.

By summer, the U.S. is expected to penalize nations that make oil purchases through Iran's central bank unless they can show they've made a significant reduction in their Iranian oil supply.

Secretary of State Hillary Clinton announced Tuesday that the 11 countries -- 10 European Union nations, as well as Japan -- had met that test.

"The actions taken by these countries were not easy," Clinton said. "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."

While the announcement demonstrates that these countries have started to cut back on their Iranian oil purchases, it also ensures that for now those countries will not have to pull out of the Iranian market entirely.

At the same time, the United States is allowing for the export of food, medicine and related products to Iran, under a long-established exemption for humanitarian items.

And that trade has spiked in recent weeks, with Iran buying wheat from the United States for the first time in three years.

According to the U.S. Department of Agriculture, U.S. companies have sold 180,000 tons of the staple crop to Iran in the past month.

Jerry Norton, a grains analyst with the USDA's World Agricultural Outlook Board, said it appears Iran is conducting the rare trade with the U.S. after running into problems purchasing grains from its usual suppliers due to weather issues.

The United States, he said, is a "last resort in many instances" for Iran.

Norton said Iran may have blown through some of its own grain supplies by feeding it to livestock. Asked whether the regime is stockpiling food to prepare for the impact of sanctions, Norton said: "It's hard to know what the Iranians are truly doing."

The transactions, though, raise questions about how effective selective sanctions can truly be.

"If the U.S. isn't prepared to be really tough, how can we expect anyone else to be?" John Bolton, former U.S. ambassador to the United Nations, told FoxNews.com in an email. "This is one reason among many why obsessing about sanctions as a remedy is ultimately illusory, misguided and self-defeating."

Bolton said the U.S. should cut off food sales to Iran, but he questioned what other transactions are still allowed despite sanctions -- and whether new restrictions would ultimately deter Iran's nuclear ambitions.

A Treasury Department official said the wheat exports are allowed under a longstanding provision "that lowers the barriers for exporters to ship food to Iran."

"The recent sanctions imposed on Iran have not changed our approach to the export of food, medicine and medical devices to Iran," the official said.

The U.S. also exported corn to Iran in 2011, and soybeans in 2010.

The Treasury Department on Tuesday also announced revised rules allowing the export of certain software to Iran.

The announcement stressed that the goal is to support the "free flow of information" to Iranians, at a time when the regime uses "an electronic curtain that prevents the Iranian people from communicating with the outside world." The clarified rules authorized basic applications like Skype, Google Talk and Acrobat.

President Obama stressed the importance of online communication services during a videotaped message to the Iranian people marking the Iranian holiday of Nowruz.

The administration has tried to distinguish between the Iranian regime and the Iranian people governed by the regime.

The announcement Tuesday by the State Department reflected the latest phase of a careful diplomatic effort to implement the new round of unilateral sanctions while giving leeway to countries that weren't necessarily prepared for them.

Some of the United States' closest allies -- including Japan, South Korea and India -- import a considerable amount of their oil supply from Iran.

India and South Korea were not on the latest list of exempted countries.