As mentioned in a previous post, the EU has further extended its sanctions against Iran, with the publication of Council Regulation 267/2012 (the “Regulation”), which came into force on 24 March 2012. The Regulation repeals and replaces Regulation 961/2010. As such, many of its provisions simply restate measures which were already in force. However, some important new measures have been brought into force.

Articles 11 and 13 of the Regulation prohibit the import, purchase or transport of crude oil, petroleum and petrochemical products. The Annexes to the Regulation contain lists of exactly which products will fall within this prohibition. Specifically, it is prohibited for any party to whom the Regulation applies to import these items from Iran into the EU, to purchase them from Iran, and to transport them from Iran to any country (worldwide, not just within the EU).

It is also prohibited (under Articles 11 and 13) to provide finance, financial assistance, insurance or reinsurance in respect of the import, purchase or transport of these products. Articles 12 and 14 do, however, provide some exemptions to this provision. In particular it is permitted to provide third party liability and environmental liability insurance and reinsurance until 1 May 2012 (in respect of petrochemical products) and 1 July 2012 (in respect of crude oil and petroleum products). These exemptions will be further reviewed when the relevant cut-off dates approach. It should be noted that some clarification will be required in respect of these exemptions. As drafted, it appears that the exemption for the provision of reinsurance applies only to environmental liability, and not third party liability. It is expected that HM Treasury will provide further clarification on this point in due course.

Under Article 35 of the Regulation, it is prohibited to broker the provision of insurance or reinsurance to Iran or its government, government entities and state companies, to Iranian persons, entities or bodies other than natural persons, and to natural or legal persons when acting on behalf of the Iranian government or Iranian entities. It should be noted, however, that it is not prohibited to provide insurance, reinsurance or the brokering of insurance to the owner of a vessel chartered by Iran, its Government, government entities or state companies, or by an Iranian person, entity or body other than a natural person.

The Regulation runs to 112 pages, including ten Annexes. The publication of this Regulation means that it will be more difficult than ever to enter into transactions which are in any way connected to Iran or to Iranian entities or persons. Given the complexity of the provisions and the length of the Annexes, it is essential that each such transaction is considered carefully on its own facts in light of the provisions of the Regulation.