Sanctions and Embargo against Iran
On 1 July 2012, Iran will see the new US sanctions and the EU Oil Embargo come into force, the combination of which will make it increasingly difficult to obtain insurance and reinsurance for any contracts that involve Iranian oil.
The United States National Defense Authorization Act was designed to increase the pressure on Iran by imposing sanctions on countries which purchase Iranian oil. It was drafted so that the US government could issue exemptions that last for 6 months for countries that took steps to reduce their trade with Iran.
Based upon publicly available information there are 23 countries trading with Iran and to date the US has granted exemptions to 18 of them due to their efforts in reducing their oil trade with Iran.
The exempted countries are:-
Belgium, the Czech Republic, France, Germany, Greece, India, Italy, Japan, Malaysia, the Netherlands, Poland, Republic of Korea, South Africa, Spain, Sri Lanka, Turkey, Taiwan and the United Kingdom.
China is one of Iran’s largest oil importers and has not been granted an exemption. As of yet, we do not know what action the US government will take once the Act comes into force.
The EU imposed an embargo on Oil/Petroleum and petrochemical products in January 2012 but the implementation of it was staggered with Petrochemical products banned from 1 May 2012, and Oil and Petroleum products banned from 1 July 2012. The staggered start dates gave sufficient time for European countries to find alternative suppliers.
There had been media speculation that the Oil and Petroleum ban would contain exemptions for P&I and environmental coverage but the EU energy commissioner has now confirmed that the ban will come into force as planned.
The EU ban will make it illegal for any European citizen or entity, regardless of where they are based, to be involved in any contract involving oil that originates from Iran irrespective of where the oil is currently located. The ban includes importing/exporting, transporting , financing and insurance/reinsurance contracts.
If you have any questions or concerns in relation to the sanctions and embargo, please contact us. Please also be aware, international regulations are constantly changing and updates provided are by no means exhaustive.
3 September 2012
Have recessionary risks hindered the opportunities available to Asian marine insurers? And is the future a profitable one?
20 July 2011
What has changed in the marine insurance markets over the last year? And can Assureds expect to see these soft markets continue?
6 December 2012
In recent months, three insurers have pulled out of the Hull and Machinery market as competitive pressures and a year of substantial claims take their toll.
28 November 2012
At the recent Meeting of the Association’s board of Directors, the general increase to be applied to the advance call rates for the 2013 policy year was set at 5%.
16 April 2013
INTTRA, the world’s largest multi-carrier shipping network for ocean freight, has launched a new member service that enables shippers to purchase cargo insurance from marine insurance specialist, FP Marine Risks.
4 February 2013
Hyperion Insurance Group Limited, the international insurance intermediary group, and FP Group Limited (FP), the Hong Kong-headquartered specialist marine broking group, are pleased to announce their partnership today, with Hyperion taking a 55% stake in FP Group Limited.
26 March 2009
26 November 2008