Thursday, 30th June 2011
Notwithstanding the recent designation of Tidewater by the US and the asset freeze imposed by the EU, the US yesterday issued a licence permitting the exportation or reexportation of agricultural commodities, medicine, or medical devices to the Government of Iran, any entity in Iran, individuals in Iran, or persons in third countries through Tidewater ports where the goods were shipped under a contract entered into prior to June 23, 2011, requiring delivery through a port or ports operated by Tidewater. To qualify a person engaged in this shipment must obtain a licence from OFAC.
The exemption will expire on 23 August.
Click here for the OFAC notice.
28 June Iranian port operator Tidewater Middle East Co. has recently been added to the US SDN list.
It is reported that the company's ports include Bandar Abbas (Shahid Rajaee Container Terminal); Bandar Imam Khomeini Grain Terminal; Bandar Anzali; one terminal at Khorramshahr; Assaluyeh port, Aprin port; and Amir Abad Port Complex.
The sanctions make it illegal for a US entity to deal with Tidewater Middle East Co.
Any non US entities which engage in business with Tidewater Middle East Co. may be in breach of sanctions and could lose the right to trade with the US.
In practical terms it will be difficult for members to use the named ports and impossible for them to remit or receive dollar payments directly or indirectly from Tidewater Middle East Co.
In practice the Association will not now be in a position to either pay or secure claims where Tidewater Middle East Co. is a party.
For details of the latest this latest addition to the US sanctions regime please visit the links below.
http://www.treasury.gov/press-center/press-releases/Pages/tgg.aspx
http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20110623.aspx
Changes to the Format of UK Treasury Designated Persons and Entities Lists
Members carrying out background checks on designated persons and entities should be aware that the UK Treasury has split the list into two sections - those sanctionable for human rights related activities and those sanctionable for nuclear proliferation related activities.
The new lists can be accessed below.
Iran nuclear proliferation sanctions
The loss prevention briefing on Iran Sanctions has been amended to reflect the current situation. The amended briefing may be accessed here.
Loss Prevention Briefing - Iran Sanctions
The Association has produced a Loss Prevention Briefing on Iran Sanctions for Member's information.
The Association is grateful for the kind assistance of Hal Eren of Eren Lawyers and Andrew D. Taylor and Mark Church Reed Smith LLP in the preparation of this document.
EU Sanctions against Iran
As Members may be aware Regulation No. 961/2010 was published on 27 October 2010. This regulation confirms previous restrictions and introduces additional restrictive measures against Iran. Additional trade restrictions apply to: -
- dual use goods, technology and equipment that may be used for internal repression
- equipment for, and investment in the Iranian oil and gas industry
- restrictions on Iranian investment in the nuclear industry including the mining of uranium
- restrictions on transfer of funds to and from Iran
- restrictions concerning the Iranian banking sector
- restrictions on Iran's access to the insurance and bonds markets of the EU
- restrictions on some services to Iranian ships and aircraft
- payments in excess of €10,000 to and from Iranian entities which are now subject to notice and (if greater than €40,000) approval from relevant EU government departments.
The Regulation has direct effect in all Members states of the EU. It applies: -
- within the EU
- to any vessel (or aircraft) under a Member state's jurisdiction
- to any EU national
- to any person, body or entity incorporated or constituted under the law of a Member state
- to any legal person or body or entity in respect of any business done in whole or in part within the EU
The Regulation applies to buyers, sellers, and transporters of goods as well as brokers, financial institutions, insurers and reinsurers.
With respect to insurance the regulation prohibits the provision of insurance (or re-insurance) to the Government of Iran and its public bodies, an Iranian person or entity or a person acting on behalf of or at the direction of either of these groups. However, this does not prevent the provision of insurance to the owner of a vessel chartered to any of the above mentioned parties provided they are not listed in the Annexes to the regulation.
Any transfer of funds to or from a party domiciled within the EU and involving an Iranian company or person will now be subject to scrutiny and should there be reasonable grounds to believe that such funds may contribute to: -
- Iran's nuclear enrichment program
- The development of nuclear weapon delivery systems by Iran
- The pursuit by Iran of activities about which the IAEA has expressed concerns
- Prohibited activities related to oil and gas production or refining
then authorisation may be withheld.
The restrictions now in place are placing a significant operational burden on Iranian shipping companies. Financial institutions are now reluctant to handle transactions involving Iran or Iranian companies or persons. As such whilst it is possible to ship goods to or from Iran in compliance with the Regulation, the practical realities of the sanctions have made the normal functions of the services provided by banks, and by the Association, extremely problematic.
Members should be aware that the Association is unlikely to be able to settle claims involving an Iranian claimant or provide security to an Iranian claimant.
Additionally Members themselves may experience the following problems when trading with Iran: -
- An inability to receive funds originating in Iran (e.g. hire, freight and the price of the goods).
- An inability to pay money into Iran (in respect of agency fees, customs dues etc).
- The Member itself may find that it is unable tosettle claims of an Iranian Claimant and its vessel may therefore be confiscated to settle the claim.
- An Iranian charterer may be unable to pay disbursements such as canal dues, bunker invoices etc.
Members who may be requested to trade to Iran or who have queries relating to sanctions should contact either Mike Salthouse or Mark Robinson for advice.
Iran - US Sanctions - Refined Petroleum Products
On 1 July 2010 the USA enacted legislation targeted at the importation of refined petroleum products into Iran. The legislation formerly referred to as the Iran Refined Petroleum Sanctions Act (or IRPSA) now goes under the more unwieldy title the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (or "CISAD").
The introduction of such legislation had been widely anticipated and Members are referred to the Association's circular Tuesday, 23rd February 2010.