A leading US lawyer has told international marine insurers to not look to circumvent new sanctions on the insurance of Iranian risks when they take effect in November.
Delegates at the 114th International Union of Marine Insurance (IUMI) annual conference in Cape Town were told that the US Office of Foreign Asset Control (OFAC) would be stringent in their oversight of the new sanctions. Those sanctions will further prohibit trade by US and US-controlled insurers in a range of named Iranian companies, individuals, and risks, following the Trump administrations withdrawal from the agreement reached with Iran over its nuclear programme.
Nooshin Namazi, partner with New York law firm, Nicoletti, Hornig and Sweeney, told the conference, “It appears highly likely that there will be no exemptions given on the new sanctions regime.”
She added that marine insurers would need to carry out due diligence and have clear exemption and exclusion clauses in their policies to prohibit coverage for risks that breach the new sanctions.
“In effect, the exclusion clause should place the risk of loss back onto the insured,” she explained. “International insurers with US or US-controlled entities will have to comply with the sanctions.”
Namazi said that insurers in the past have been found in breach by OFAC and that it was only those underwriting entities that took proactive action when they found a policy may have been in breach and declared it to OFAC and co-operated fully that have seen a more positive approach from the US government.
The debate comes as the International Group of P&I Club continues to examine how its members can offer liability cover to shipping firms that legally trade with Iran.
The new sanctions will add complexity to the situation and the International Group is seeking wide ranging legal opinions on the scope to which its members can operate without falling foul of the new regulations.
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