Joint War Committee adds Iran to high risk list
IRAN has been added to the Lloyd"s Market Association list of high risk areas, a move thought to reflect unclarity over the impending imposition of US sanctions on the country in light of fears that it is seeking to develop nuclear weapons.
Both the House and Senate have backed legislation that will effectively criminalise vessels of any flag that carry refined petroleum products to Iran, although any such law ultimately requires the final say-so of president Barack Obama.
As things stand, the legislation is so widely worded that owners, charterers, managers, crew and insurance interests including P&I could all fall foul. Provision of insurance or reinsurance for those engaging in petroleum product trade is expressly prohibited.
The LMA decision was taken by the Joint War Committee on March 11, but has only now become public. Neil Roberts, secretary of the LMA, which represents the interests of underwriting businesses in the Lloyd"s market, said ships transiting the region will have to notify underwriters of voyages up to 12 nautical miles off Iran"s coast.
?The reason it has been added is that underwriters are mindful of possible US sanctions against the country and really need to have a good idea of their exposures and the trade they are covering. Underwriters will have to be commercial in the way they approach this situation,? Mr Roberts told Reuters.
Describing the measure as simply proactive, he added that there was a threat that the US Treasury"s Office of Foreign Assets Control would prevent businesses in breach of the sanctions from undertaking dollar transactions.
?The legislation is still not fully framed and we are not really sure what we will be dealing with,? Mr Roberts said.
A marine insurance industry source said the costs in relation to Iran would be looked at on a ?case by case basis?. He considered it highly unlikely that there will be wholesale repricing of risk.
International Group P&I clubs are reportedly liaising with shipowner associations to develop protective clauses for incorporation into charterparties and bills of lading in order to ensure that they avoid prosecution.
If enacted, the Iran sanctions legislation will be widely seen as an another attempt by the US to make its laws apply beyond its borders, as exemplified by the Helms-Burton Act penalising foreign companies doing business in Cuba, and its desire for 100% scanning of containers at ports of export.
Islamic Republic of Iran Shipping Lines, Iran"s main shipping line, is already subject to restrictions in several jurisdictions, including the US, the UK and Bermuda, which have already cost it P&I cover twice in the last year.