Iran Sanctions – Post Implementation Date
On 16 January 2016 and following the International Atomic Energy Agency’s (IAEA) verification that Iran had complied with the requirements described in Sections 15.1 – 15.11 of Annex V of the JCPOA, the EU and the US have lifted certain sanctions against Iran in line with their commitments set out in Sections 16 and 17 of the said annex.
Under Section 16, all nuclear related economic and financial EU sanctions have been lifted and the provisions of Council Decision 2010/413/CFSP and Council Regulation (EU) 267/2012 have been terminated or amended. The Information Note published by the EU sets out a detailed list of the sanctions lifted and include, financial, banking, insurance, oil, gas, petrochemical, shipping, shipbuilding, transport sectors, gold, banknotes, metals, and software. As of 16 January (Implementation Day), certain individuals and entities have been delisted and therefore are no longer subject to asset freeze and visa bans. However, there still remains certain sanction measures in place, post Implementation Day. They include arms related/arms embargo, missile technology sanctions, and individuals and entities still subject to restrictive measures under the UN and EU listings. Furthermore, nuclear-related dealings are still subject to prior authorisation by the competent authorities of the EU member state.
The sanctions lifted by the US are those set out in Section 17 of Annex V of the JCPOA. As described in Section 17, the US has agreed to lift secondary sanctions on Iran and set out only a few exceptions in extending the relief to primary sanctions under OFAC’s prior authorisation (i.e. license). Under the agreement, the US government has lifted nuclear-related secondary sanctions on Iran’s various sectors of economy, including financial, banking, energy, petrochemical, insurance, shipping, shipbuilding, gold, metals, minerals, and automative. Furthermore, a number of individuals and entities have been removed from the OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN lists).
It is important to note that the measures provided by the US government are largely directed towards non-US persons (secondary sanctions). Therefore, primary sanctions still remain in place, and with limited exceptions, US individuals and companies continue to be broadly prohibited from doing business with Iran. In other words, US persons are generally barred from exporting goods, services or technology to Iran, directly or indirectly, and prohibited to provide underwriting services, insurance and reinsurance or paying claims to the Iranian shipping fleet (e.g. IRISL or NITC). That aspect has created a major concern among the banking, financial, insurance and reinsurance sectors globally. For instance, no P&I club of the International Group (IG) can provide cover to the Iranian shipowners due to the fact that the pool layer and reinsurance arrangements of the IG have US person (i.e. primary sanctions) elements. This can also be relevant in so far as the fixed market (hull, war risks, etc.) is concerned.
We understand that the P&I clubs are currently discussing the matter and hoping to find a solution and we will provide an update as soon as it is available.
Dr. Shahab Mokhtari
Tel: +44 (0) 20 73750002