IRAN

US has more or less a complete ban for US persons (that is US citizens and permanent resident aliens, persons physically in the United States (regardless of citizenship), US-organized entities and their branches, and any foreign entity owned or controlled by a US person) to do any transaction with an Iranian nexus. Sanctions that may be applicable to other persons than US persons are essentially limited to (1) sanctions imposed by EU and (2) secondary imposed by the US.

1. Sanctions imposed by EU

Prohibited cargoes and activities

Cargoes that requires a license:

For detailed information about the EU sanctions please see document below:

Iran Sanctions - European Union (30 June 2016)

2. Secondary sanctions imposed by the US

Non-US persons are generally prohibited to ship US goods to Iran or make any monetary transaction having an Iranian nexus involving the US financial system, or any foreign branch of the US bank, regardless of the currency involved. Other US secondary sanctions, which were essentially lifted under the Iran nuclear deal (JCPOA), will apply as follows following the US withdrawal from the JCPOA on 8 May 2018:

Prohibited cargoes and activites as from 6 August 2018:

Prohibited cargoes and activites as from 4 November 2018:

Prohibited cargoes and activities as from 8 May 2019

Regarding insurance the following applies:

Section 202 of the Iran Threat Reduction and Syria Human Rights Act of 2012

Section 1246 of the Iran Freedom and Counter-proliferation Act (IFCA)

Regarding bunkering the following applies:

For detailed information about the US secondary sanctions, please see OFAC’s website including the FAQ section.

Executive Order 13871 May 2019
Executive Order 13846 Aug 2018

FAQ OFAC Aug 2019
FAQ OFAC Nov 2018
FAQ OFAC Aug 2018

The US secondary sanctions pose particular problems for members based in EU states or otherwise subject to EU law. Pursuant to Council Regulation 2271/96, as amended by Delegated Regulation 2018/1100, EU companies/persons are required not to comply with US secondary sanctions. In addition, EU companies/persons will be reimbursed for losses, caused by the application of US secondary sanctions. For more information about Delegated Regulation 2018/1100, please see P&I Circular of 9 August 2018.

In sum, the situation regarding US sanctions is complex. EU based companies/persons may find themselves in a position where they either are in breach of US sanctions or EU sanctions. Members are therefore recommended to exercise great caution and to seek legal advice should they contemplate any business relationship or transactions with an Iranian nexus.

CUBA

Cuban Sanctions – United States (6 September 2019)

LIBYA

The Sanctions Legislation (4 December 2013)
Operational and Practical Issues (25 Januari 2012)
Frequently Asked Questions (25 Januari 2012)

RUSSIA

Russian Sanctions - European Union (13 January 2018)
Russian Sanctions - United States (16 April 2018)

SUDAN/SOUTH SUDAN

Sudan Sanctions - European Union (11 January 2018)
Sudan Sanctions - United States (11 January 2018)

SYRIA

Member Alert, Syria Sanctions (13 May 2016)
Syria Sanctions - United States (14 December 2015)
Syria Sanctions - European Union (16 December 2014)

VENEZUELA

US government sanctions companies trading with Venezuelan oil (8 April 2019)
Venezuela Sanctions - United States (August 2019)
Member Alert, Sanctions against Venezuela impact shipping (4 February 2019)
OFAC FAQ Venezuela Sanctions
US impose new sanctions against Venezuela (29 January 2019)

 


Notes on Sanctions and P&I Cover

P&I cover for liabilities arising out of sanctions legislation is available only under limited circumstances. In the event the sanctions legislation will trigger a penalty by way of a fine imposed on the member this will be covered pursuant to the test in P&I Rule 7 Section 6. Consequently, the Club’s position, in line with that of other Clubs, is that the member has a duty to take steps to satisfy the legality of the member’s own actions, and to ensure the vessel is not engaged in any unlawful trade, see inter alia P&I Rules 10 and 11. Hence, unless the member can show that reasonable steps were taken to avoid the sanction and that the circumstances otherwise would justify Club cover then the penalty is likely to fall outside Club cover.

The same test is likely to apply for other liabilities that could arise due to sanctions legislation, for instance if cargo onboard a vessel is damaged in the event the vessel is detained or banned from trading as a result of sanctions legislation, particularly if the legislation and its implications was known or ought to have been known to the member. In certain severe situations where breach of sanctions legislation has been made with knowledge of the member there is a risk that the P&I insurance can cease altogether pursuant to Rule 27 (f). However, it is important to keep in mind that each situation is unique and cover issues have to be decided in the light of prevailing circumstances.

Sanctions legislation affecting the Club and its reinsurers may also have impact on Club cover. Pursuant to Rule 11 Section 4 liabilities may be excluded from cover in case payment of a claim is likely to expose the Club or any of its reinsurers to sanctions. The payment restrictions in the EU Iran sanctions legislation are examples of such legislation. To this end, the Club is subject to Swedish law and to the authority of the Swedish Financial Supervisory Authority although the legislation in other countries may be relevant. Needless to say, payment restrictions may also prevent the Club from assisting a member in providing a guarantee for example providing a Letter of Undertaking to a cargo claimant.

Members are encouraged to seek specific legal advice on any activity or transaction which may involve sanctions legislation in order to assess their exposure to sanctions. This is particularly important because sanctions legislation may have adverse impact on the members’ P&I cover. In addition, the Club’s ability to assist members may become restricted due to sanctions legislation.

In case members have any further questions regarding sanctions and Club cover please contact the Club.