The decision by President Trump on 8th May, 2018 to cease the US participation in the JCPOA and to re-impose US nuclear-related sanctions which were lifted to implement the JCPOA, is likely to have significant consequences for maritime trade with Iran and the insurance of such trade, the UK P&I Club warns.
One potential consequence of the US withdrawal from the JCPOA could be that, in the event of ship detention, clubs could encounter difficulties putting up security in the context of any claim with an Iran nexus.
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As the UK Club noted, the position in relation to calls at Iranian ports under pre-8 May contracts during the wind down period up to 6 August and 4 November 2018 is unclear in a number of respects on which the International Group (IG) is awaiting clarification and/or guidance from OFAC.
Because of such an uncertainty, caution should be exercised in respect of all calls at Iranian ports, especially if they are made under post-8 May contracts and under all transactions after November 4, 2018. Moreover, due diligence should be exercised to make sure that neither the cargoes carried nor the parties involved in the transactions offend US sanctions.
Furthermore, from 6 August 2018, the sale, supply or transfer, directly or indirectly, to or from Iran of the following materials: graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes is sanctionable where the material is:
- To be used in connection with the energy, shipping or shipbuilding sectors of Iran or any sector of the economy of Iran controlled directly or indirectly by Iran’s Revolutionary Guard Corps.
- Sold, supplied or transferred to or from an Iranian person on the SDN List (other than Iranian financial institutions that have not been designated for the imposition of sanctions).
- To be used in connection with the nuclear, military or ballistic missile programs of Iran.
From 6 August 2018, the following activities will be subject to the re-imposition of sanctions:
- Iran’s trade in gold or precious metals;
- Significant transactions related to the purchase or sale of Iranian currency, or the maintenance of significant funds or accounts outside the territory of
- Iran that occurs in Iranian currency;
- The purchase, subscription to, or facilitation of the issuance of Iran sovereign debt;
- Iran’s automotive sector.
As for maritime and non-maritime activities related to the 180 days’ wind-down, from 4 November 4 2018, US sanctions will be re-imposed on:
- Iran’s energy sector;
- Iran’s port operators;
- Iran’s shipping and shipbuilding sectors, including the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line, or their affiliates;
- Petroleum related transactions, with, among others, the National Iranian Oil Company (“NIOC”), Naftiran Intertrade Company (“NICO”), and National Iranian Tanker Company (“NITC”) including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
- The provision of underwriting services, insurance, or reinsurance;
- Transactions by foreign financial institutions with the Central Bank of Iran and other foreign financial institutions that have been designated under NDAA Section 1245;
- The provision of specialized financial messaging services to the Central Bank of Iran and other Iranian financial institutions.
What is more, after the JCPOA implementation in January 2016, hundreds of individuals and entities were removed from the US sanctions lists. These parties will now be relisted no later than 5 November 2018. Most of these parties will be subject to secondary sanctions.
