IRANIAN SANCTIONS
In view of the wording of Article
32(b), it may appear that by simply not carrying out due-diligence on counterparties or vessels, a party could rely on the defence should it later be held in breach of sanctions. However, such a strategy is fraught with risk where, as a matter of policy, it is likely to be implied that the defence under Article 32
Iran has little refining capacity despite being the world’s fifth largest crude oil exporter ...
is only available to a party where reasonable due-diligence had been carried out in the first instance. Of course, until someone seeks to rely on Article 32(b), we cannot be sure of the extent to which the defence can be successfully invoked.
United Kingdom On June 10th
2010, HM Treasury
issued a notification that, with immediate effect, the individuals and entities targeted by UN Resolution 1929 will now constitute “designated persons” within the UK financial sanctions regime against Iran. HM Treasury has since also issued a detailed commentary on the new EU Regulation. The UK’s Iran (Financial Sanctions)
Order 2007 created criminal penalties for a breach of previous European sanctions against Iran. It is envisaged that the UK will pass a similar statutory instrument in the near future in respect of the new Regulation.
Diane Galloway
(Partner) and Andrew Duckworth (Associate) work in the London office of Reed Smith,
the global relationship law firm with nearly 1,600 lawyers in 22
offices throughout the US, Europe, Asia and the Middle East.
www.ReedSmith.com
Switzerland The Swiss Federal Council has recently amended the Ordinance dated February 14th
2007 imposing sanctions against Iran. The
Ordinance now implements all of the UN Resolutions imposing sanctions against Iran including the latest, Resolution 1929. On July 14th
2010, the competent Swiss authority (SECO) issued
an “Information Note” which sets out the way Swiss companies shall behave if they are bound by contracts with persons who are subject to the UN asset freeze. In short, the Information Note provides that: – Swiss companies shall try to terminate early any contracts entered into with listed persons;
– Entering into new contracts with listed persons is forbidden; – No payment shall be made to or received from a listed person without SECO’s authorisation;
– Any request for an authorisation to be issued by SECO shall be completed using the relevant form and enclose a copy of the contract.
The Swiss Federal Council has not, however, implemented the
latest EU sanctions and nor, we understand, does it have any immediate intention to do so.
Compliance Measures In light of the emerging consensus on Iran sanctions between
the US, Europe and various other countries, all those involved in the trade or financing of commodities who are subject to such sanction regimes will need to adapt their internal procedures to ensure that they do not engage in commercial activities with or involving these entities which would place them in a position of non-compliance. In particular, we recommend that such adaptations include:
(a) The checking of counterparties, end-receivers, vessels and banks against the SDN List and/or the HM Treasury’s list of all individuals/entities that are targeted by UN, EU and UK sanctions; and
(b) The insertion of appropriate contractual wording into contracts which expressly sets out that neither party is required to take or refrain from taking any action that would place it in a position of non-compliance with specified sanction regimes.
Conclusion Clearly, these sanctions regimes are
intended to exert financial pressure on Iran by specifically targeting the country’s energy-based economy: Iran has little refining capacity despite being the world’s fifth largest crude oil exporter and is therefore dependent upon gasoline imports for domestic consumptions. The sanctions regimes are now more
extensive and numerous than ever before so it is easy to be unaware of their potential reach. Those who operate in the energy sector need therefore to pay special attention. •
80 December 2010
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96