Iranian sanctions lifting – a warning

Jan 31 2014


A lack of clarity could jeopardise the lifting of sanctions against shipowners exporting Iranian crude, a leading P&I club has warned.

Owners and operators may go unpaid if they claim against insurance policies after 20th July, the date temporary relief of sanctions against Iran is due to expire, or be renewed, Norwegian insurance concern Gard said.

The US Office of Foreign Assets Control (OFAC), part of the US Treasury, has declined to clarify whether claims would be recoverable after July even if the incident happened before then, it warned.

The US and other western nations agreed to ease some sanctions against Iran for six months starting 20th January. The relaxation included suspending an EU insurance and reinsurance ban that had barred most international tanker owners from getting coverage to carry Iranian oil.

“Members and clubs should proceed on the basis that beyond 20th July, 2014, clubs will not be able to respond to any claims presented in respect of liabilities arising during the January/July suspension period,” Gard said in a notice to members. “This has the effect of rendering the current suspension of sanctions on insurance cover and in particular P&I cover, of very limited, if any, value to shipowners.”

Gard said that OFAC had advised that it is not presently able to confirm whether the insurance cover provided in respect of liabilities arising during the six month period will be prohibited from responding after 20th July, 2014.

Members and clubs should proceed on the basis that beyond 20th July, 2014 (or any extension of the initial six-month period), clubs will not be able to respond to any claims presented in respect of liabilities arising during the January/July suspension period, Gard said.

Shipowners should be aware that a club is unlikely to be in a position to provide security for a claim in circumstances in which a demand under a club letter of undertaking may be made after 20th July, 2014.

Clubs may also be unable to provide ‘Blue Cards’ to members who enter into contractual commitments, which will include the shipments of Iranian crude, petroleum oil (as defined in Annex 1 to Regulation 2014/42/EU), or petrochemical cargoes, under which clubs could be exposed to liability after this date.

Gard further advised its members not to enter into contracts for oil shipments, which are for a limited period (up to 20th July, 2014) permissible by virtue of the US/EU six-month suspension of prohibitions on the carriage of such cargoes without prior consultation with the club in relation to insurance cover arrangements. 



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