Iran sanctions knowledge

Last week saw significant developments in the U.S. sanctions programs targeting Venezuela and Iran. The developments underscore the need for non-U.S. persons and entities which operate in international shipping to exercise utmost diligence in their dealings involving or potentially involving either country.
The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has continued to focus on international shipping as a means to implement the Iranian sanctions program and has now turned its attention to the bunkering of vessels engaged in Iranian trade or involving Iranian vessels.
Update 13/06/19: Due to the recent attack on vessels in the Sea of Oman, Members are reminded of the following update and to exercise extreme caution in the region.
On May 8, 2019, exactly one year after President Trump announced that the United States was withdrawing from the Joint Comprehensive Plan of Action (“JCPOA”) and would re-impose the U.S. secondary sanctions against Iran, President Trump issued an Executive Order “Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran.”
As reported in Circular 16/18 when U.S. secondary sanctions were re-imposed against the purchase...
OUTLINE Members are reminded of Circular 4/18 which outlines the effects of the US withdrawal from JCPOA If Members conduct Iranian trade, they are advised to do so with great caution,...
We refer to the Club’s update on Iran sanctions of 26th June 2018, regarding the decision of the United States to withdraw from the Joint Comprehensive Plan of Action (“JCPOA”) and to re-impose secondary sanctions.
The International Group has engaged extensively with the (OFAC) in the U.S. and its European counterparts to explain some of the practical effects arising from the reactivation of U.S. secondary sanctions
Following the President’s May 8, 2018 decision to withdraw from the JCPOA and to begin re-imposing the U.S. nuclear-related sanctions OFAC issued a Frequently Asked Questions document which was updated on 27th June 2018. OFAC...
The decision by President Trump announced on 8th May, 2018 to cease the US participation in the JCPOA and to begin re-imposing US nuclear-related sanctions which were lifted to implement the JCPOA, is likely to have significant ramifications for maritime trade with Iran and the insurance of such trade.
Members will have noted the decision by President Trump announced on May 8 to withdraw the USA from participation in the JCPOA (Joint Comprehensive Plan of Action) agreed between Iran, the EU, and the P5+1 (the five permanent members of the United Nations Security Council  - China, France, Russia, United Kingdom, United States - plus Germany), and to re-impose US nuclear-related sanctions.
On August 2, 2017, President Trump signed into law the "Countering America's Adversaries Through Sanctions Act". The Act imposes new and further sanctions on Iran, Russia and North Korea.
Members are reminded of Circular 6/16: Iran Trading – increased limit of fall-back cover, which informed Members that The International Group had purchased €100 million of “fall-back” cover to respond to any reinsurance recovery shortfalls. The International Group announced last week that the "fall-back" reinsurance programme will not need to be renewed past 20th February 2017. The full text of the notice is below, and is also available on the International Group website here.
OUTLINEThe International Group has purchased €100 million of “fall-back” cover to respond to any reinsurance recovery shortfalls.“Fall-back” does not provide a long term solution to Members’...
Members are referred to our Circular 3/16 concerning Iran sanctions.This Circular is intended to update members on the latest developments in relation to the interim and longer-term solutions to the reinsurance recovery shortfall risk under the Group General Excess Loss reinsurance programme and Hydra retrocession programme.
The Club has issued a number of updates and circulars on the implications of sanctions on cover. The continuing application of US primary sanctions to US domiciled reinsurers participating in the Group's reinsurance arrangements...
Iran trading – P&I cover - Members are referred to Circular 18/15 concerning developments with regard to Iran sanctions. This Circular is intended to assist Members when deciding whether to trade to/from Iran by explaining what P&I cover is available as well as identifying any possible shortfalls in cover.  Some of the matters detailed below may also apply when Members’ ships trade to/from other countries which are subject to US sanctions.
Given the global announcement of “Implementation Day” - that there will be a lifting of sanctions on Iran, the Club and IG are examining closely what this actually means in reality for Iran’s oil, gas, shipping, petrochemicals, insurance and financial sectors, and importantly for those owners/operators wishing to engage business with Iran. 
The diplomatic agreement of 14 July 2015 between the E3/EU+3 and the Islamic Republic of Iran opens the way for the restoration of trade activates with Iran by lifting the trade, energy, insurance and banking embargoes that have been incrementally imposed by the European Union and U.S since 2009.
There have been reports from the P5+1/Iran nuclear negotiations in Vienna that the deadline for reaching an agreement has now been extended through July 10th 2015. Once again, all terms of the Joint Plan of Action will continue...
The Joint Plan of Action (“JPoA”) agreed by the P5+1 and Iran, which brought limited sanctions relief, is set to expire today, 30th June 2015. While there has been no official world, recent developments suggest that it is highly unlikely that a final agreement on a nuclear deal with Iran will be reached by tomorrow.
The Club has been made aware of recent attempts to export crude oil from Iran in breach of sanctions. On several occasions, oil has been carried from Iran, to Kor Fakkan UAE, under documents falsely describing the cargo as having been loaded in Iraq. It has then been delivered by ship-to-ship transfer to vessels bound for countries that do not benefit from a waiver under applicable US Sanctions legislation. 
Confirmation received from the US government and the EU Council that the existing relief program, which ran from 20 January to 20 July, suspending certain Iran sanctions measures, is being extended for 4 months to 24 November 2014.
OUTLINE: The International Group is seeking clarification on the extent to which Club cover can respond to liabilities arising during the six month suspension period; Some liabilities may only crystallise or be presented after the six month suspension period has ended (20th July 2014);  The Club may be unable to provide security for a claim in circumstances in which a demand  under  a club letter of undertaking be made after 20th July 2014;  The Club may be unable to provide Blue Cards to Members who contract to carry Iranian crude oil, petroleum and petrochemical products after 20th July 2014;  Members are strongly urged to consult the Club regarding insurance cover before contracting to transport Iranian crude oil, petroleum and petrochemical products 
The easing of U.S. sanctions may have the most significant impact on the maritime community is the permissible trade in Iranian petrochemicals, as well as the permissible trade in Iranian crude oil to the six countries permitted to continue their purchases of Iranian crude. However, at this point there is no guarantee that the easing of sanctions will continue beyond 180 days, and, therefore, those in the maritime community should not enter any long-term contracts based on the relief granted on January 20. Further, it should be noted that if a permissible activity under the eased sanctions is initiated within the JPoA period, but is not completed until after that period expires on July 20, 2014, the activity will be subject to sanctions.
The United States government has published its initial advices on the temporary, partial suspension of sanctions relating to the trade in Iranian oil, petroleum products and petrochemicals and associated services such as insurance. 
A significant suspension of EU and US sanctions against Iran, albeit on a temporary trial basis, will commence on 20th January 2014
A relaxation of current EU and US sanctions from 20th January for trial six month period will enable the Club to provide cover for certain voyages carrying Iranian oil and petroleum products as well as petrochemicals.  Members are recommended to review these changes carefully and consult their relevant Competent Authority and the Club where appropriate before engaging in potentially sanctioned activity.
Following the agreement reached in November last year between Iran and representatives of USA, UK, China, France, Russia & Germany,  the Club reminded Members that a formal change in EU, UK and US laws would be needed to provide shipowners and their insurers with relief from existing prohibitions - and that until such changes were made, the effect of sanctions on Club cover would remain unaltered.
The agreement at last weekend's summit between Iran and representatives of USA, UK, China, France, Russia & Germany on the Iranian nuclear programme has encouraged speculation that sanctions against Iran will be markedly reduced.  We have attached two useful updates on sanctions from law firms Clyde & Co. and Freehill which provide insights into the changes that may arise after the recent summit. 
Questions Related to the Issuance of the Executive Order "Authorizing the lmplementation of Certain Sanctions Set Forth in the lran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions With Respect to Iran" and the lmplementation of Certain Provisions of the lran Freedom And Counter-Proliferation Act of 2012 (IFCA) On June 3, 2013, the President signed an Executive Order (E.O.) "Authorizing the lmplementation of Certain Sanctions Set Forth in the lran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions With Respect to Iran." The E.O. implements certain statutory provisions of the lran Freedom and Counter-Proliferation Act of 2012 (IFCA) and authorizes the imposition of additional sanctions with respect to Iran. Most of the IFCA provisions target conduct occurring on or after July 1,2013. The E.O. becomes effective on July 1,201 3. [06-03-13]
The International Group has prepared a briefing note on the new US sanctions measures which is attached here.
The attached FAQs from the International Group provide a comprehensive summary of the relevant legislation and key provisions that impact on trade activities and financial transactions with Iran, including restrictions on the movement of goods to and from Iran and the provision of services that could affect shipowners and their insurers if shipowners perform sanctionable voyages to or from Iran.
BackgroundOn 15 October 2012 the European Union Foreign Affairs Council agreed further measures restricting trade activities with Iran. The Council Decision 2012/635/CFSP has been given effect in a new Council...
Recent Action Notice for Publication of ITSR (Iranian Transactions and Sanctions Regulations) Amendment The Department of the Treasury’s Office of Foreign Assets Control published a final rule in the Federal Register...
IRAN SANCTIONS UPDATE - THE EU IMPLEMENTS NEW RESTRICTIVE MEASURES - published by Holman Fenwick Willan  The EU continues to impose new sanctions against Iran. The latest measures significantly increase the...
On 21 December 2012, the EU Council approved the implementing regulation (Regulation (EU) No 1263/2012 amending Regulation (EU) No 267/2012) concerning restrictive measures against Iran. The new regulation gives legal effect to the restrictive measures agreed in Council Decision 2012/635/CFSP adopted in October 2012 (previously reported on the Club webpage: EU sanctions on Iran extend to natural gas).
On October 9, 2012, the president issued an Executive Order implementing sanctions set forth in the Iran Threat Reduction and Syria Human Rights Act of 2012, which bars foreign subsidiaries of U.S. companies from engaging in most...
The EU Foreign Affairs Council recently published new prohibitions contained in Council Decision 2012/635. The full text of that Decision can be viewed in our International Sanctions section. These new FAQs from the International Group provide a summary of the Decision’s key provisions that could affect Members.
The European Union Council’s decision to prohibit the transport of natural gas from Iran extends to the insurance of such transport.  It is likely to have an immediate impact on Members whether or not subject to EU jurisdictions.  When the decision takes effect, the Club will not provide cover to any Member in respect of carriage of natural gas originated in Iran.
On the 16th October an EU Council decision declared a prohibition on the transport of natural gas to Iran.  The ban extends the insurance and reinsurance of such transport so will have impact on Members whether or not subject to the EU jurisdictions.  When the Decision takes effect, the Club will be prohibited from providing cover to any Member in respect of carriage of natural gas originated in Iran.
On 1st August 2012 President Obama signed a new Executive Order on Iran. It gives new sanctions authorities to both the Department of the Treasury and the Department of State. The E.O. authorizes the Secretary of the Treasury to...
This US Treasury press release and attached papers explains how the United States is imposing additional sanctions on Iran’s nuclear and ballistic missile proliferation networks.  It is also taking additional steps to prevent the evasion of sanctions by publicly identifying a group of Iranian front companies and banks designating 11 entities and four individuals under Executive Order 13382.
The latest package of EU sanctions against Iran will apply as earlier decided. Following a review of the measures, the Council confirmed that they would remain as approved in January. This means that two exemptions will end, as scheduled, on 1 July: Contracts for importing Iranian oil that were concluded before 23 January will have to be terminated by 1 July. From the same date, EU insurers may no more provide third-party liability and environmental liability insurance for the transport of Iranian oil.
New European Union Measures against Iran - Council Regulation 267/2012 dated 23 March 2012 - Frequently Asked Questions – Updated on 14th August 2012. 
This updated flowchart provides guidance on compliance with sanctions against Iran following the EU Council Regulation of 23rd March 2012.  It references both US and EU sanctions arrangements and offers answers in the context of trading to and from Iran, or with Iranian parties outside the country. 
The EU Council has now agreed a Regulation to implement enhanced sanctions against Iran, including a ban on transport of Iranian crude, petroleum products and petro-chemical products, as was expected in the light of the EU Decision of 23 January.  There is now an exception to the insurance ban, for third party and environmental insurance, although only up until 1 July for crude oil and petroleum products and only until 1 May for petro-chemical products. It is not clear whether the position will be reviewed again before those dates.
On 23rd January the EU Council published a Decision which prohibits the import, purchase or transport of crude oil, as well as petroleum and petrochemical products from Iran.  It also prohibits the provision of insurance relating to their transport.
The latest sanctions against Iran have been much publicized and are set against a backdrop of Iranian officials threatening to escalate the situation further by blocking the Strait of Hormuz.  This alert focuses on the key developments and also provides an update on the sanctions against Syria.
Following the resolution adopted by the IAEA Board of Governors on November 18, 2011 (“IAEA Resolution”), the Korean government has announced an additional set of guidelines on December 16, 2011.  The attached analysis provides a summary of Korea’s new guideline (“Guideline”), and how it is expected to affect the private sector in doing business with Iran.  This analysis replaces the earlier material published on the Club website.
On November 2011, the US State Department issued a fact sheet on Energy-Related Sanctions under Executive Order (E.O.) 13590 (see below). Among other things, it clarifies that "The Executive Order would not cover the purchase of petroleum resources or petrochemical products from Iran, or the shipping of those products from Iran, absent other sanctionable conduct.".
EU Council Regulation 1245 has extended the list of parties in Iran subject to sanctions.
The publication of the International Atomic Energy Agency's latest report on Iran has prompted a fresh round of sanctions against Iran. The White House and U.S. Treasury took a series of actions yesterday to increase pressure on Iran.  The biggest impact for the shipping industry would seem to be the new petroleum sector sanctions under Executive Order 13590, which are aimed at non-U.S. persons that provide support to Iran's energy sector.  This briefing note also includes information on the UK's Financial Restrictions (Iran) Order 2011.
HM Treasury has imposed new financial restrictions against Iran. From 15:00 Monday 21 November 2011, all UK credit and financial institutions are required to cease business relationships and transactions with all Iranian banks, including their branches and subsidiaries, and the Central Bank of Iran. This means that UK credit and financial institutions are prohibited from entering into transactions or business relationships with these entities and continuing existing transactions and business relationships with them, unless licensed to do so by HM Treasury.
On the 23rd June, the US Government issued a Joint Statement on Iran Sanctions which added the main provider of Iranian port services, Tidewater Middle East Co, to its Specially Designated Nationals ("SDN") list.  The US government has included Tidewater Middle East on the basis that its ports have been used “to export arms or related materiel in violation of United Nations Security Council Resolutions (UNSCRs)". This item was amended on 4th July to explain more specifically the Club's cover in relation to the port operator, rather than the geographic port .
CISADA was signed by President Obama on 1 July 2010. The Act is particularly targeted at restricting Iran’s ability to develop its domestic refined petroleum product (RPP) production ability and specifically bans the import of RPP to Iran, the import or provision of goods or services that could maintain or repair Iran’s refineries or “facilitate” the development of the Iran’s refining capability.
HM Treasury issued a Financial Sanction / Counter Illicit Finance Notice (the "Treasury Notice") on 27 October 2010 witha detailed commentary on the EU Regulation. 
On October 27, 2010, the EU published the Regulation 961/2010 to implement the Council Decision of 26 July 2010 concerning restrictive measures against Iran setting out existing EU sanctions, and also imposing new EU sanctions.  The Regulation has immediate effect from 27th October 2010 and does not require implementing legislation to be enacted by the individual EU Member States. 
Rule 5(J)(ii) introduced at February 2010 gives the Directors power to terminate a Member’s insurance if his activities expose the Club to sanction Club circular (Ref no. 10/10) advised Members of the enactment on 1st July 2010 of CISADA a new US law revising US economic sanctions against Iran Under the terms of CISADA, the export of refined petroleum products (RPP) to Iran (amongst other activities) is subject to the imposition of sanctions by the US The Club Board considers that the risk to the Association of a sanction under CISADA is material within the terms of Rule 5(J)(ii)
Circular on Iranian sanctions wef 1 July and CISADA legislation

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