Iran, Syria and North Korea Sanctions Legislation – Proposed 180 Day Rule, Certification and Enhanced Inspections

12 January 2012

Members should be aware of the ongoing review by the US of their sanctions policies in respect of Iran, Syria and North Korea.  Although no legislation has come into force which directly affects shipping since our News Alert of 16 December 2011 (click here to review the latest legislation as at that date), there are now US proposals regarding a 180 day rule, certification and enhanced inspections which, if they are adopted, may significantly affect Members who currently continue trading with Iran, Syria or North Korea. Under the proposed legislation:

  • Ships would be prohibited from calling at any port in the US if the vessel has entered a port in Iran, Syria or North Korea during the last 180 days preceding the arrival of the ship in the US.
  • Either the owner, charterer, operator or the master would be required prior to arrival in the US to certify compliance with the proposed 180 day rule.
  • Federal authorities would be authorised to carry out enhanced inspection on ships that have called in Iran, Syria or North Korea in the preceding 12 months in order to determine whether the ship was involved in US sanctioned activities. The Federal Authorities are expected to know from available tracking systems which ships calling at US ports have traded with these countries in the preceding 12 months.
  • Ships which are found to have submitted false declarations could be subject to prohibitions including a prohibition from calling at US ports for a period of at least two years.

The timing and final version of the new sanctions legislation is currently under review by the Senate; and the US administration to date has therefore been unable to clarify a number of important issues in case the 180 day rule is adopted, including:

  • Whether the 180 day rule will have retrospective effect i.e. whether the relevant 180 days trading history will be the 180 days before or after the day the legislation comes into force.
  • Whether the prohibitions can be extended to include other ships in the same ownership, management or control.
  • Whether any exemptions can be obtained if the ship is contractually bound to proceed to ports in Iran, Syria or North Korea at the time the legislation is adopted.

The International Group of P&I Clubs will continue to monitor developments with regard to the progress or changes of the proposed legislation but in the meantime Members are recommended to bear these potential developments in mind if they wish to continue trading with Iran, Syria or North Korea.