Skuld advises on risk management and sanctions of Iranian crude

Need for good pre-contract due diligence and adequate contractual sanctions clause

Operators in the tanker trade will have over time become familiar with the sanction regime on Iran and should have existing procedures in place to ensure appropriate due diligence is undertaken to ensure that neither a cargo nor a counterparty will put them at risk of breaching the sanction regime.

The recent STS trend, now fuelled by contango, will require a renewed level of attention and appropriate follow up to ensure that one does not become an unwitting accessory to a sanctions breach.

The Skuld P&I Club advises the following for check:

where is the cargo being taken on
is the cargo operation performed, in part or in full, by way of a STS
will the STS be undertaken in national waters of a specific country
will the STS be undertaken, in part, outside of national waters
is there a request that the cargo be co-mingled or blended
what cargo documentation will be made available in advance
what cargo specifications will be made available in advance
will cargo be sampled and tested at any stage, if so by whom and where
are counterparties known and “tested”
can local agents assist in verifying the origin of the cargo and identify of other involved parties

These questions will need to be considered with a particular focus on the specific new risk scenarios that come with STS and contango operations.

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Good pre-contract due diligence and adequate contractual sanctions clause provision are also necessary, as part of a comprehensive commercial risk management procedure.

Post fixing, the operations team needs to be alert to unusual requests concerning the routing of the vessel, unscheduled STS, blending, change of destination, change of documentation, turning off of AIS and other such requests that could indicate something untoward being planned.

If in doubt, stop and check. Genuine counterparties shipping legitimate cargo should have no issue with providing legitimately required information and documentation. A reluctance to share information or even silence are signs of a potential problem

Further details may be found on Skuld’s website at Insight section – Iran Sanctions

For further information, contact loss prevention at Skuld: [email protected]

Source: The Skuld P&I Club