Update on the anticipated EU prohibitions and exemptions regarding the transportation of Iranian crude oil, petroleum products and petrochemical products
9 February 2012
The latest round of EU proposed measures against Iran were published in Council Decision 2012/35 on 23rd January 2012. Whilst the EU Decision has immediate effect on EU Member States, they are not to be binding on individuals and corporations until the EU Regulation has been issued which implements the proposed measures.
The date and content of the implementing EU Regulation is still not known but Members who continue to trade with Iran should take into account that the Regulation may closely follow the proposed measures and could come into effect within the next weeks.
The proposed measures include a prohibition on “import, purchase or transport of Iranian crude oil, petroleum products and petrochemical products”. The proposed measures also include the insurance of such transport and are therefore also to affect Members who are not EU subjects (since the Association would in any event be subject to the prohibitions in the Regulation).
The proposed measures contain exemptions for contracts concluded before 23rd January 2012 and for contracts which are ancillary to such contracts. The performance of these exempted contracts would still be allowed under the proposed measures until 1st July 2012 (for crude and petroleum products) and until 1st May 2012 (for petrochemical products).
The EU authorities have clarified to the International Group that contracts for the transportation of the proposed prohibited products are “ancillary” if they are necessary for the execution of obligations under trade contracts which were concluded prior to 23rd January 2012. Accordingly, based on the current clarifications received from the EU, Members who intend to perform the transportation of those products during the anticipated exempted period will need to satisfy themselves that the transportation contract is necessary for the performance of a trade contract concluded before 23rd January 2012. Although the Regulation is not yet into force, Members may already wish to take into account this recent guidance received from the EU with a view to minimising the risk of contravening the law by entering into contracts which continue or which are due to be performed once the Regulation comes into force.
So far the EU authorities have provided no guidance on the dates which will be used in the Regulation for the exempted contracts and the exemption period but it would be prudent to assume that the Regulation will use the same dates of the EU Decision as stated above.
Pending publication of the Regulation it is not possible to definitively advise on the impact of the proposed measures though the International Group has prepared FAQs to provide initial guidance to Clubs and Members on a number of key issues arising. These will be periodically updated as further issues arise and once the Regulation enters into effect. A copy of the FAQs can be found be clicking here
Members are also invited to visit the Association’s website which has a dedicated section on Sanctions (under News Alerts/Sanctions) and which can be found by clicking here