Members will recall that under US sanctions law, transportation of Iranian crude oil is temporarily permitted only to the following so called waiver countries: China, India, Japan, South Korea, Taiwan and Turkey (see Club’s Member Alert of 28 November 2014).

In recent weeks it has become apparent that attempts are being made to dupe shipowners into transporting Iranian oil to non US waiver countries by loading it at Khor Fakkan in the UAE.  Shippers appear to be transporting the sanctioned cargo from Iran to Khor Fakkan using feeder ships and then, using falsified cargo documentation, by way of STS transfer to innocent vessels at Khor Fakkan. The documentation describes the cargo as having an origin other than Iran (so far Iraqi ports have been named) and may also misdescribe the shippers.

There is evidence of a sophisticated smuggling operation and those responsible may go to considerable lengths to disguise the true origin of the cargo. Cargo documentation is likely to appear credible and there may be no evidence of any designated parties being involved.  Members are therefore advised to exercise caution when engaging in STS operations in the Persian Gulf. In particular it is recommended that Members check with port agents to ensure that vessels providing cargo by means of an STS transfer in the region loaded the cargo at the port stated in the cargo documentation before any cargo is received. It is also advisable to ensure that charter parties contain an appropriate sanctions clause. BIMCO’s sanctions clause for time charterparties can be found here.

Members are reminded that shipment of Iranian crude oil in breach of sanctions legislation will lead to an absence of insurance cover under P&I Rules 11:4 and 27(e). Such carriage is also likely to result in serious consequences for the Member.

For questions about Iran sanctions please contact any Claims Manager or Anders Leissner, Director Corporate Legal & FD&D.

Member Alert is published by The Swedish Club as a service to members. While the information is believed correct, the Club cannot assume responsibility for completeness or accuracy.