The US withdrew from the JCPOA, and its decision to reactivate the nuclear-related laws that were waived in order to implement the JCPOA, will have significant implications for maritime trade with Iran and the insurance of such trade.
In order to maintain the principles established under the JCPOA framework, facilitate the continuation of trade activities between European businesses and Iran, and to counteract the extraterritorial effect of US secondary sanctions, the European Union has replaced the annex to Council Regulation (EC) No 2271/96, otherwise known as the Blocking Regulation.
Namely, the Commission Delegated Regulation (2018/1100) of 6 June 2018 gives effect to the replacement of the Annex from 7 August 2018. The new annex sets out amongst others the US laws, regulations and other legislative instruments regarding the trade with Iran from the Iran Sanctions Act 1996 onwards that have been subject to waivers under the JCPOA since 16 January 2016.
Nevertheless, those waivers will stop gradually from 6 August 2018 with a final date of 4 November for certain trade activities, including the transport of oil cargoes, by which date the performance of contracts must be either executed or terminated.
As for shipowners and insurers, a national of an EU Member State or a legal person incorporated within the European Union who suffers a damage as a result of another legal person in the European Union complying with the US measures, may seek recovery of damages arising from that legal person.
EU Member States also have to uphold the EU measures. Attention is however drawn to the Guidance Note which reflects the right of an EU operator, consistent with the provisions of the Blocking Regulation, to make its own assessment of the economic situation and its decision on whether to start, continue or stop business operations in Iran.
Exemption from the Regulation is permissible under Art. 5, providing that a natural or legal person to whom the Regulation applies can demonstrate that compliance with the Regulation would seriously damage their interests. Shipowners incorporated within the European Union who believe that they might face a claim for damages from another entity incorporated within the European Union for not performing under a contract involving activity subject to US sanctions can also seek an authorisation under the Blocking Regulation in order to protect their business interests from the risk of enforcement action by OFAC for breach of US sanctions.