Re-imposition of US nuclear-related sanctions 25 January 2019 No.18-016 Tweet Download PDF (215KB) Our special circular No.18-002 issued on 28 May 2018 outlined the potential repercussions for shipowners and insurers arising from the U.S. Administration’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) Agreement signed by China, France, Germany, Russia, the United Kingdom, the United States, the European Union (EU) and Iran.   The U.S. has now re-imposed sanctions on Iran that had been lifted or waived under the JCPOA with the second and final wind down period coming to an end on 4th November 2018. The U.S. has made it clear that it expects all non-U.S. persons to comply with the secondary sanctions that have been re-imposed. The U.S. and the E.U. now take divergent approaches with the E.U. seeking to maintain the sanctions relief provided for by the JCPOA by, amongst other things, amending the annex to Council Regulation (EC) No 2271/96, otherwise known as the Blocking Regulation.   Following the end of the wind down period there may still be some limited trade with Iran that is possible for non-U.S. persons to undertake without a significant risk of violating U.S. secondary sanctions (for example, the carriage of certain agricultural commodities, consumer goods and foodstuffs, see OFAC FAQ 637). Members should be aware, however, that even if the trade does not appear to violate U.S. sanctions, practical difficulties mean that it is extremely unlikely that International Group Clubs will be in a position to make or receive payments, provide security or respond to any claims in the usual manner.   In circumstances where a Club does cover a claim with an Iranian nexus, there is the potential for there to be significant reinsurance shortfalls. For the 2018/19 policy year, individual International Group (IG) Clubs retain the first US$10 million of liabilities arising from an incident. Between US$10 million and US$100 million, liab