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Iran Skirts EU Sanctions, Offers to Insure Foreign Ships

July 17, 2012

Iran said on Tuesday it would insure any foreign ships that enter its waters, as part of an effort to skirt a European Union ban on insuring ships carrying Iranian crude that has hampered the country’s oil exports.

“The Islamic Republic of Iran will take all responsibility for insuring any foreign shipping line and any ship that enters Iranian waters,” the Fars news agency quoted Seyyed Ataollah Sadr, the managing director of Iran’s Ports and Maritime Organization, as having said.

“The Islamic Republic of Iran has adopted measures with the cooperation of Iranian insurance companies,” he added.

On July 1, the EU enacted a ban on insurance for tankers carrying Iranian oil, preventing EU insurers and reinsurers from covering tankers carrying Iran’s crude anywhere in the world.

The Fars report did not provide details of how the Iranian scheme would work for foreign companies and how insurance would be paid in the event of an accident at sea.

Iran has been forced to shut off wells in its expansive oil fields as Western sanctions reduce Tehran’s vital crude oil exports by as much as 30%.

Tehran’s current production levels to lows not seen in more than two decades, which has cost Iran billions in lost revenues.

Last week, the United States unleashed a fresh wave of sanctions against Iran, ratcheting up pressure to convince Tehran to take seriously concerns about its suspected nuclear weapons program.

The new actions impose additional sanctions on Iran’s nuclear and ballistic missile proliferation networks and identify Iranian “front” companies and banks to assist in compliance.

A senior official from Iran’s major tanker operator NITC told the Reuters news agency in June that it had secured insurance cover from privately owned Iranian provider Kish PI, with $1 billion in insurance in the event of a collision or oil spill.

Kish PI relies on state-run Central Insurance of Iran as its reinsurer, Reuters noted. Any claim made against it would likely have to go through a sanctioned bank. Nevertheless, Kish has said it is confident it would be able to pay Western ship industry claims in the event of accidents.

The report added that Japan had completely halted Iranian crude imports in July because of the lack of cover, but last week industry sources said Japanese insurers were expanding their maritime coverage to allow more domestic tankers to transport Iranian crude.

Article source: http://www.israelnationalnews.com/News/News.aspx/157961

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