EU Restrictive Measures Against Iran Update

The Council of the European Union has implemented additional restrictive measures against Iran with effect from 23 January 2012.

The restrictive measures have been published under the EU Common and Foreign Security Policy as Council Decision 2012/35/CFSP which amends Decision 2010/413/CFSP.

A copy of the full EU Council Decision can be read here.

The additional restrictive measures are intended to prohibit the importation, transport, financing, insurance and reinsurance of crude oil, petroleum and petrochemical products from Iran.

As a result of the additional restrictive measures, it is now unlawful for the Association to provide P&I or other insurance to a vessel engaged in trades which contravene the prohibitions contained in Articles 3(a) and (b) of Council Decision 2010/413/CFSP as amended, the text of which appears below. Members are reminded that under rules of the Association the entry of a Member and a vessel will cease in circumstances where the vessel is employed in a carriage, trade or voyage which , or the provision of insurance for which, will expose the Association to the risk of being or becoming subject to any sanction, prohibition or adverse action. The trading of a vessel in breach of applicable sanctions legislation may also reduce or extinguish the Association’s liability to pay claims.

The relevant sections of the Council Decision are set out below.

“Article 3a

1. The import, purchase or transport of Iranian crude oil and petroleum products shall be prohibited.

The Union shall take the necessary measures in order to determine the relevant items to be covered by this provision.

2. It shall be prohibited to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and reinsurance, related to the import, purchase, or transport of Iranian crude oil and petroleum products.

Article 3b

1. The import, purchase or transport of Iranian petrochemical products shall be prohibited.

The Union shall take the necessary measures in order to determine the relevant items to be covered by this provision.

2. It shall be prohibited to provide, directly or indirectly, financing or financial assistance, as well as insurance and reinsurance, related to the import, purchase, or transport of Iranian petrochemical products

Article 3c

1. The prohibitions set out in Article 3a shall be without prejudice to the execution, until 1 July 2012, of contracts concluded before 23 January 2012 or ancillary contracts necessary for the execution of such contracts, to be concluded and executed not later than 1 July 2012.

2. The prohibitions set out in Article 3a shall be without prejudice to the execution of obligations provided for in contracts concluded before 23 January 2012 or in ancillary contracts necessary for the execution of such obligations where the supply of Iranian crude oil and petroleum products or the proceeds derived from their supply are for the reimbursement of outstanding amounts with respect to contracts concluded before 23 January 2012 to persons or entities within the territories of Member States or under their jurisdiction, where those contracts specifically provide for such reimbursements.

Article 3d

1. The prohibitions set out in Article 3b shall be without prejudice to the execution, until 1 May 2012, of contracts concluded before 23 January 2012 or in ancillary contracts necessary for the execution of such contracts, to be concluded and executed not later than 1 May 2012.

2. The prohibitions set out in Article 3b shall be without prejudice to the execution of obligations provided for in contracts concluded before 23 January 2012 or in ancillary contracts necessary for the execution of such obligations where the supply of petrochemical products or the proceeds derived from the supply of these products are for the reimbursement of outstanding amounts with respect to contracts concluded before 23 January 2012 to persons or entities within the territories of Member States or under their jurisdiction, where those contracts.”

Annex I of the amended Council Decision extends the list of persons and entities to which the restrictive measures apply, this now includes amongst others the Central Bank of Iran and Bank Tejarat.

Any Members currently involved in the trade of crude oil, petroleum or petrochemical products from Iran should contact Mark Robinson or Mike Salthouse at the Club for advice.