Iran Sanctions - Update on the Geneva Joint Plan of Action and P&I cover available

Members will be aware of the recent suspension of sanctions measures relating to certain trades with Iran for a six month period between 20 January 2014 and 20 July 2014 (click here for the News Alert of 21 January 2014 for further details).

The International Group has been continuing to engage with the relevant US and EU regulators to clarify the intended operation of the suspension of sanctions in relation to the provision of insurance. As regards the US implementation of the suspension measures, one issue on which the International Group has been seeking clarification is the extent to which Clubs will be able to respond to liabilities arising during the suspension period, but which may not be crystallised or presented until after 20 July 2014.

The US Office of Foreign Assets Control (OFAC) has advised that it is not presently able to confirm whether insurance cover, in respect of liabilities arising during the six month period, will be prohibited from responding after 20 July 2014.

Click here for the full text of the International Group update.

If it is the case that insurance for liabilities which arose during the period whilst the sanctions were suspended may not respond after 20 July 2014, then this would appear to have the effect of rendering the current suspension of sanctions to be of very limited (if any) value in terms of Club cover provided to Members. Members should exercise caution when entering into contracts for the transportation of crude oil, petroleum oil and petrochemical products that are temporarily permissible by the Geneva Joint Plan of Action.

The International Group is continuing its efforts to obtain clarification of the US position and the Club will provide a further update when this is available. 

Members requiring further assistance and/or clarification in relation to the above, and in particular any Iran-related matters that may affect Club cover, should approach their usual Club contact.