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Web Alert: Sanctions - Joint Plan of Action to ease sanctions against Iran

29 November 2013

After intensive negotiations in Geneva, early on 24 November a joint plan of action was agreed between Iran and the P5+1 / E3+3 (the three EU states of France, Germany and the UK plus the USA, Russia and China).  This involves a limited easing of sanctions against Iran in return for Iran making concessions in respect of its nuclear programme, including a halt to uranium enrichment over 5% purity and the neutralisation of part of its existing stockpile. 
 
The initial reciprocal measures are to be for a 6 month period, but this is renewable and is intended as a first step towards a final, comprehensive solution that would allow for the lifting of all nuclear-related sanctions against Iran; and for Iran’s nuclear programme to be treated in the same manner as that of any non-nuclear weapon state party to the Treaty on the Non-Proliferation of Nuclear Weapons.
 
Under the initial 6 month plan, there would be a moratorium on new nuclear-related UN sanctions.  The majority of the EU and US sanctions would also remain in place, but with the easing of some of these.  In particular, so far as shipowners are concerned:

1. US and EU sanctions are to be suspended on:

  • Iran’s petrochemical exports;
  • Iran’s automobile industry (currently imposed under the US sanctions); and
  • gold and precious metals.

2. Iranian crude oil sales are to be permitted to remain at current levels, i.e. with Iran’s current customers being allowed to purchase their existing average amounts of crude oil.  We understand that the EU ban on imports of Iranian crude into the EU therefore will remain in force.  However, it would also follow that imports of Iranian crude may continue at up to existing levels to non-EU countries currently granted “NDAA 2012” waivers, allowing such importation under the US extraterritorial sanctions. 

3.  The US fact sheet does not refer to any suspension of associated insurance, transportation or financial services.  However, the Joint Plan of Action confirms the intention to suspend the EU and US sanctions on associated insurance and transportation services not involving designated Iranian entities.  As with the above, we need to await the implementing measures to know what will be allowed under the new regime.  However, this relaxation may facilitate the provision of club cover for lawful voyages involving the carriage of Iranian crude.

4. EU authorisation thresholds for non-sanctioned trade transactions also will be increased, although again no details of the new levels have yet been provided.
 
The existing EU and US sanctions are discussed respectively in the club’s June 2013 web alert and the club’s Standard Bulletin, Special Edition: Sanctions, July 2013.  Apart from the specific concessions listed in the Joint Plan of Action, other restrictions are likely to remain in place.  These include the sanctions on designated Iranian entities, such as the National Iranian Tanker Co.  The USA in particular has emphasised that all of these remaining sanctions will be vigorously enforced.

 
The European Commission has indicated that the proposed relaxation of the EU sanctions may be implemented in December 2013 or January 2014.  A similar time frame may be adopted by the USA, partly depending on progress in Iran.

Until then, the current sanctions regimes will remain in force and the club cover position is unaltered.  This current position is discussed in the respective International Group FAQs on the EU and US sanctions.  If members have any queries they should contact the club and/or seek specific legal advice.

The EU FAQs may be found at:

Amended European Union Measures against Iran - Council Regulation 1263/2012 dated 21 December 2012 - Frequently Asked Questions - Updated 29 January 2013
New European Union Measures against Iran - Council Regulation2012/635/CFSP - Frequently asked questions - updated 1 November 2012
New European Union Measures against Iran - Council Regulation 267/2012 dated 23 March 2012 - Frequently Asked Questions - updated 15 August 2012
New European Union Measures against Iran - Council Regulation 267/2012 dated 23 March 2012 - Frequently Asked Questions – updated 25 May 2012
New European Union Measures against Iran - Council Decision 2012/35 dated 23 January 2012 - Frequently Asked Questions

The US FAQs may be found here.