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Developments in international sanctions
Both the EU and the United States have announced extension of their sanctions against the Syrian Arab Republic to prohibit the trade, transport or financing of crude oil or petroleum products.
Under Rule 5V (Sanctions risks) the Club excludes cover where the provision of cover may expose the Club to a sanction or other adverse action from a competent government.
Further commentary on the US and EU sanctions can be found in our International sanctions item linked from the home page of the Club website. International sanctions is one of the current industry developments for which we publish advisories, or re-publish useful content from our industry colleagues. Recent advice from lawyers Reed Smith, in respect of EU and US sanctions, and from Dewey and LeBoeuf LLP in the United States can be found in that section.
Additional resources in the International sanctions section are the website for the ‘Delegation of the European Union to Syria’ - that maintains releases and other documents relating to various aspects of EU relationship with Syria. This web link gives background to decisions on sanction – and the US Treasury resource centre for sanctions against Syria - a variety of resources including the original texts of presidential executive orders, statutes, regulations and guidance notes in relation to US sanctions against Syria.
Whilst the EU has lifted sanctions against the six main ports of Libya under its latest regulation, Members are reminded that some sanctions remain in place. Whilst the ports were de-listed due to confirmation by the National Transitional Council of Libya that they are now under their control, the EU regulation still lists 27 entities and 39 individuals that are subject to sanction.
Rule 5V (Sanctions risks) – 2011 Rules & Bye-Laws
i) The Association shall not indemnify an Owner against any liabilities, costs or expenses where the provision of cover, the payment of any claim or the provision of any benefit in respect of those liabilities, costs or expenses may expose the Association to any sanction, prohibition, restriction or adverse action by any competent authority or government.
ii) The Owner shall in no circumstances be entitled to recover from the Association that part of any liabilities, costs or expenses which is not recovered by the Association from any party to the Pooling Agreement and/or from any reinsurer because of a shortfall in recovery from such party or reinsurer by reason of any sanction, prohibition or adverse action by a competent authority or government or the risk thereof if payment were to be made by such party or reinsurer. For the purposes of this paragraph, “shortfall” includes, but is not limited to, any failure or delay in recovery by the Association by reason of the said party or reinsurer making payment into a designated account in compliance with the requirements of any competent authority or government.
Rule 5V can be found on page 46 of the 2011 Rules & Bye-Laws. These 2011 Club Rules are published in pdf format in the Publications section of this website. Alternatively, a physical copy of the Rules can be obtained from your usual Club contact.