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Friday, December 15, 2017

EU refuse to budge on 1 July cut off date for Iranian Sanctions for P & I Clubs

Members will recall that we have advised in detail on the EU Sanctions against Iran (WN 5 April and 27 Jan). There has been much talk of an extension of time for the sanctions to bite third-party insurers. The EU initially responded by granting a grace period up to 1 July 2012. Up to that point there was a window of opportunity for non-EU tankers with International Group P & I insurance to lift crude oil from Iran.

That time has almost run out and there will be no further extension. The Foreign Office Affairs Committee has issued a press release to back this up. The press release states that following a review of the measures, the Council of the EU confirmed that the sanctions would remain as approved in January. This means that from 1 July 2012, contracts for importing Iranian oil concluded before 23 January will have to be terminated, and that EU insurers will no longer be allowed to provide third-party liability and environmental liability insurance for the transport of Iranian oil.

The full effect of this decision will no doubt be seen post 1 July as some nations struggle to find alternative supplies or other solutions. Japan has for example approved sovereign insurance cover up to $7.6bn for each tanker delivering Iranian crude to its refineries, meaning that non-EU owners may have the opportunity to continue to lift crude from Iran after 1 July if they can take advantage of this insurance facility in place of International Group P & I Club cover.

We continue to advise our Members of the need to take specialist legal advice before conducting any trade involving Iran.

Contact: Michele White