Underwriters from London’s marine insurance market are looking at how to comply with fresh sanctions being imposed on Iran, a senior Lloyd’s Market Association (LMA) official said on Friday.
Iran, the world’s fifth-largest crude oil exporter, depends on its seaborne trade.
U.S. President Barack Obama signed into law on Thursday far-reaching new sanctions that aim to squeeze the Islamic Republic’s fuel imports and increase its international isolation.
“The whole issue of sanctions is resonating around the market — it is a key issue,” Neil Roberts, a senior technical executive with the LMA, told Reuters. “Underwriters have been keeping a careful eye on what is going on and they are trying to address it in their own way.”
The London marine insurance market plays an influential role in the global marine insurance industry. The LMA represents the interests of all underwriting businesses in the Lloyd’s market.
“The wider issue of sanctions and extra territorial legislation has been an issue ever since the Iranian situation arose a few months ago when they started talking about petroleum sanctions,” Roberts said.
He said marine underwriters aimed to demonstrate to authorities they were complying with legislation. “What we have been working on is a clause which makes our position clear at the outset that there are situations where underwriters may not be able to give cover and also and may not be able to pay a claim if it is in some way illegal for them to do so. They are looking to fashion a wording that does the job for them.”
COMPANIES STOP TRADE
Obama said the sanctions, the toughest ever passed by the U.S. Congress, would make it harder for Iran to buy refined petroleum as well as goods and services to modernize its oil and natural gas sector, the mainstay of its economy.
The United States and its European allies suspect Iran is trying to build an atomic bomb. Tehran has said its nuclear program is for the peaceful generation of electricity.
Iran has already found it harder to secure trade finance. A number of oil companies, trading houses and other international companies have stopped doing business with the country this year fearing they may fall foul of U.S. sanctions.
The LMA’s Roberts said the clause was still under discussion.
Earlier this year the LMA’s Joint War Committee added Iran to a list of areas it considered high risk for merchant vessels.
The Financial Times reported on its website late on Thursday that Lloyd’s of London, the insurance market, was restricting cover for any ships carrying petroleum to Iran.
A Lloyd’s of London spokeswoman said she could not confirm the newspaper report.
Lloyd’s General Counsel Sean McGovern said in a statement late on Thursday it would “always comply with applicable sanctions”.
Was this article valuable?
Here are more articles you may enjoy.