1 of 4 JULY 15, 2010 CIRCULAR NO. 20/10 TO MEMBERS OF THE ASSOCIATION Dear Member: THE COMPREHENSIVE IRAN SANCTIONS, ACCOUNTABILITY, AND DIVESTMENT ACT OF 2010 (CISADA): RULE CHANGES TO TAKE EFFECT FROM JULY 30, 2010 Introduction Reference is made to Circular No. 06/10 of February 11, 2010 which alerted Members to impending economic sanctions legislation against Iran in the United States and elsewhere. That Circular also contained the terms of an “enabling” Rule to take account of such sanctions, and similar government and regulatory prohibitions. This was incorporated as a new Subsection 53 to Class I, Rule 1, Section 4 – General Insurance Provisions – in the Club’s Rules for 2010. The relevant wording is set out on page 39 of the current Rule Book. Since that time, and as Members may be aware through press and other reports, there have been several important developments along the lines anticipated by the Circular referred to above. These developments have made necessary the Rule changes of which the present Circular gives notice to Members, and in respect of which further details are provided below. Background – recent legislative developments As alluded to above, several legislative and regulatory events have recently taken place. These include the United Nations Security Council Resolution (UNSCR) 1929 on Iran, and the expected implementation thereof by the United Kingdom, other European Union member states and other countries elsewhere in the world. In addition, and in amplification of the Iranian Transactions Regulations (ITR) which govern present US economic sanctions against Iran, President Obama recently signed into law the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), formerly known as the Iran Refined Petroleum Sanctions Act (IRPSA) to which reference was made in Circular No. 06/10 mentioned above. This new legislation has serious implications for American Club Members who are not United States persons within the meaning of ITR or CISADA. It is in response to these particular circumstances that the Rule changes notified in this Circular have been enacted by your Board under the enabling provision described above. New Club Rules in response to these developments Accordingly, pursuant to that enabling provision in the Club’s Rules, setting forth and articulating as it does the American Club’s policy in regard to the management and mitigation of economic sanctions and attendant risk, and in light of the Club’s US economic sanctions compliance 2 of 4 policy, your Board has determined to implement the following provision to take the form of a new Sub-section 4 to Class I, Rule 3, Section 1 – Risks Excluded – as follows: “Preclusion of/exclusion from cover of certain voyages involving Iran 4 Notwithstanding anything to the contrary contained in these Rules or in the Association’s Charter or By-Laws or in a Member’s Certificate of Entry into the Association, and until and unless authorized by the Directors through any subsequent amendment of the Association’s Rules, or as may be authorized in writing specifically by the Managers on a case-by-case basis, coverage hereunder, with effect from Noon GMT, July 30, 2010, shall not include or, as the case may be, shall terminate and cease to include, any voyage or service to or within Iran, including in Iranian territorial waters, of any vessel otherwise insured hereunder if such voyage and/or service is for or relates to the sale, exportation, provision, trans