By Ravi P. Jawani

In our previous newsletter it was highlighted that The Comprehensive Iran Sanctions, Accountability and Divestment Act (S.2799), was passed by the Senate and is expected a favourable vote in the House of Representatives. Along with S. 2799, Iran Refined Petroleum Sanctions Act (H.R.2194), was passed in the House of Representatives in December 2009, and has just recently been referred to the Senate Committee on Banking, Housing and Urban Affairs. 

Both “sanctions” are thus still in the form of a bill, however it seems that the US government is very keen to impose these sanctions against Iran, as mentioned during Obama’s trip to France and in his meeting with Sarkozy.

In their present form, these bills are going beyond oil products and are imposing sanctions on any insurer who provides cover for ships or cargoes destined for Iran even if the ship or her owner and crew are engaged in perfectly lawful trade under their relevant national laws. Accordingly, sanctions will be imposed on shipping companies, as they already are to insurance, investors and banks dealing with Iran.

Lloyd’s underwriters have reacted quickly and stopped charging an additional premium for vessels entering Iranian waters as Iran has now being added to the list of excluded areas. In other words, this means that shipowners loose their covers if the underwriters are not notified of the ship’s entering into Iranian waters, a sound and easy way of keeping track of any shipowner dealing with Iran.

Therefore in order to safeguard the interest of their business, companies – unless deciding to end their dealings with Iran for good – may have to restructure their commerce and keep the “Iranian” business separate from the rest of their businesses.
We are glad to see as latest development in this saga that the UK government have confirmed to British Marine they can continue to provide reinsurance to the Islamic P&I Club, based on the fact that, according to British Marine managing director Robert Johnston, the Club is Dubai-based and there is a 50/50 membership split between Arabic and Iranian shipowners.
We are continuing to monitor developments in relation to these pending legislation and will advise further of any material developments. For any clarifications and/or more information, please feel free to contact Ravi P. Jawani on ravi.jawani@fichtelegal.com