American Club Circular No. 02/13 1 JANUARY 09, 2013 CIRCULAR NO. 02/13 TO MEMBERS OF THE ASSOCIATION Dear Member: ADDITIONAL UNITED STATES SANCTIONS WITH RESPECT TO IRAN Your Managers pass on herein news of recently implemented US sanctions concerning Iran. On January 2, 2013, President Obama signed into law the Iran Freedom and Counter-Proliferation Act of 2012 (the Act), as part of the National Defense Authorization Act for 2013, expanding the category of activities by non-US persons involving Iran which could result in the imposition of sanctions against such non-US persons, and providing for the blocking of the property of additional Iran sanctions targets. The Act is mainly designed to restrict the ability of Iran’s energy, shipping, shipbuilding and port sectors to generate revenues to support nuclear proliferation activities. The Act also seeks to curtail Iran’s access to certain materials, and restricts Iran’s ability to use its oil revenues. The sanctions (punitive measures) that can be imposed under the Act are those which are enumerated in section 6 of the Iran Sanctions Act, as amended, and can range from the mild sanctions of denial of US Exim bank credits to the harshest sanctions of the blocking of property and a prohibition on all transactions. This latter sanction means the freezing of assets within the US jurisdiction and a cut-off from all dealings with the United States and US persons. The Annex to this Circular contains an outline/summary of the sections of the Act providing for the imposition of sanctions, the blocking of property, and the imposition of restrictions on Iran’s use of its oil and gas revenues. The sanctions mentioned in the Act will be applicable 180 days after the enactment of the Act, i.e. on July 2, 2013. Members are requested to note these developments, and their implications for trade. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB Annex to American Club Circular No. 02/13 1 ANNEX TO CIRCULAR NO. 02/13 OF JANUARY 9, 2012. O UTLINE OF RELEVANT SECTIONS OF THE IRAN FREEDOM AND COUNTER-PROLIFERATION ACT OF 2012 _____________________________________________ Section 1244: Imposition of sanctions with respect to the energy, shipping and shipbuilding sectors of Iran. Section 1244: ‐ requires the blocking of the property of persons (entities and Individuals) determined to: o be a part of the energy, shipping or shipbuilding sectors of Iran; o be a port operator in Iran; o have knowingly provided significant financial, material, technological or other support to any of the foregoing persons, or to an Iranian person listed on the US Treasury Department Office of Foreign Assets Control (OFAC)’s List of Specially Designated National and Blocked Persons (other than an Iranian financial institution that has not been designated for the imposition of sanctions for nuclear proliferation reasons, international terrorism, or abuse of human rights reasons). ‐ requires the imposition of sanctions against or with respect to persons that sell, supply or transfer significant goods and services used in connection with the energy, shipping, or shipbuilding sectors of Iran, including the National Iranian Oil Company, the National Iranian Tanker Company, and the Islamic Republic of Iran Shipping Lines. A foreign financial institution will also face US sanctions if it facilitates a significant financial transaction for the sale, supply, or transfer to or f