Bloomberg News

New EU Sanctions on Iran Seen by Clyde & Co. Squeezing Shippers

January 10, 2013

The latest European Union sanctions against Iran are so sweeping that ship owners might break them by failing to prevent transportation of the country’s oil even if they never actually do so, said Clyde & Co.

The 27-nation bloc published a regulation on Dec. 23 implementing measures approved in October to pressure the Persian Gulf country to give up its nuclear program. Clyde, an international law firm, commented in an e-mailed report today.

“The amended regulation also includes for the first time a prohibition against the making available of vessels designed for the transport or storage of oil/petrochemical products to an Iranian person, entity or body. The phrase ‘making available’ is sufficiently broad that it would probably encompass the sale or charter of a tanker to an Iranian person as well as the brokering of a fixture of a tanker and perhaps the financing of the purchase of a tanker by an Iranian person.

“However, there is a further prohibition against making available a tanker to any person -- not just an Iranian person - - unless the provider has taken ‘appropriate action to prevent the vessel from being used to carry or store oil or petrochemical products that originate in Iran or have been exported from Iran.’ Such a broad prohibition means that it is theoretically possible for an owner to breach the regulation -- even if the vessel never loads Iranian origin petroleum products -- simply by failing to take ‘appropriate action’ to prevent the carriage/storage of Iranian origin petroleum products when chartering the vessel.

“The recent amendments significantly ramp up the pressure on Iran by targeting the shipping industry in much the same way as the oil and gas industry and the insurance industry have previously been targeted. Ship repairers, classification societies and owners/operators of vessels will all need to consider their current trading contracts to ensure that they do not inadvertently either breach the regulation themselves or cause events to take place that result in the withdrawal of class.”

To contact the reporter on this story: Isaac Arnsdorf in London at iarnsdorf@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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