International Group updates on Iran sanctions

The International Group has issued a circular updating on the situation relating to the reimposition of sanctions by the US on Iran, announced on May 8th. IG said that the decision by President Trump announced on May 8th 2018 to cease the US participation in the JCPOA and to begin re-imposing US nuclear-related sanctions which were lifted to implement the JCPOA, was likely to have significant ramifications for maritime trade with Iran and the insurance of such trade.

The Group said that it was already engaged with US OFAC, seeking clarification on a number of aspects of the application of the Presidential Memorandum, including in relation to the continuation of pre-May 8th contractual obligations during the “wind-down” period, permitted trade with Iran after the August 6th and November 4th deadlines and in relation to the wind down of the General Licence H arrangements applying to non-US domiciled affiliates and subsidiaries of US domiciled insurers and reinsurers.

IG noted that, since the remaining JCPOA partners had reaffirmed their support for the JCPOA, the Group was also engaging with the UK Treasury and with the EU External Action Service in relation to the impact of the US decision, and possible EU measures, on the Clubs and their reinsurers.

IG warned that the position might become more complex in the short-term by virtue of the continued support for the JCPOA by its other signatories and by the recent threat of further sanctions being imposed by the US.

“Shipowners and charterers who are considering trading to Iran should understand that P&I cover for such trade is unlikely to remain in place where there is a risk that providing insurance risks the imposition of sanctions by the US”, the International Group concluded.