Iran Sanctions Update - 15th January 2014
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.
Legislative amendments are now under consideration. On 7th January 2014, the European Union published proposals to lift some aspects of the sanctions by amending Regulation (EU) No 267/2012.
The proposals can be found at this link:http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=JOIN:2013:0032:FIN:EN:PDF
It remains to be seen how quickly the proposal will result in a binding Regulation and whether the drafting will change. However, if the law is amended in the way that is proposed, it will have the following results in relation to Regulation 267:
- Lifting of:
the prohibitions under articles 11.1(c) and (d) on transport and insurance/reinsurance activities in respect of crude oil and petroleum products that are of Iranian origin or imported from Iran;
the prohibitions in article 13 on import, purchase, transport and insurance of petrochemical products; the prohibitions in article 15 on trade with the government or central bank of Iran, or those acting on their behalf, in gold, precious metals and diamonds;
the prohibitions in article 37b on making available vessels designed for the transport or storage of oil and petrochemical products to any Iranian person or entity or to others where the vessel is used to carry or store Iranian oil or petrochemical products.
- A tenfold increase in the authorisation thresholds under article 30 for transfers of funds that are permitted in relation to Iran, and
- A power for States to authorise the release or making available of funds or economic resources, in derogation from the Iranian asset freezing provisions of paragraphs 2 and 3 of article 23, where necessary for the execution of contracts to import, purchase or transport petrochemical products of Iranian origin or imported from Iran.
Members should note that the proposal does not contain any suggestion to lift the existing prohibition on import or purchase in the EU of Iranian crude oil or petroleum products.
Members should also note that at this stage it remains unclear whether the US political process will allow the US sanctions regime to be amended in step with changes that are made in the EU.
As the Club's business is conducted in US dollars, it remains essential to comply with any applicable US sanctions laws, as well as those of the EU and UK. The current US sanctions are complex (the Club has an onlineresource page
collating the latest information on sanctions.), but include prohibitions against owning, operating, controlling or insuring a vessel used to transport crude oil from Iran to another country; providing insurance or reinsurance to or for any activity with respect to Iran for which sanctions have been imposed under the various sanctions laws of the US; the sale or provision to Iran of refined petroleum products (RPP) under CISADA or which significantly contribute to Iran's ability to maintain or expand its domestic production of petrochemicals; sale or provision to Iran of goods or services enhancing Iran's ability to maintain or expand its domestic production of RPP.
The Managers will continue, in liaison with the International Group, to monitor any developments and to keep Members informed.
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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.
2016 Autumn Statement
The Club's performance over the first six months of the year has been extremely strong. After six months of the year, total notified claims on the prudently reserved 2016 policy year are encouraging with few large claims within the Club or Pool retentions. Claims on prior policy years have also developed favourably. Full details of the Club's half year financials are available in the attached '2016 Autumn Review'.