Sanctions against Iran and their effects on the global shipping industry

Sammanfattning: Economic sanctions are defined as the exercise of pressure by one state to bring about a change in political behaviour of another state. Traditional economic sanctions are directed at the entire population of the sanctioned country while targeted sanctions are directed at the State’s government and/or individuals. Iran has become a sanction target first in 1979, which was imposed by United States. More sanctions have been imposed by the United Nations, the European Union and various countries such as United Kingdom, Australia, Norway and South Korea. The sanctions mainly aim to target Iran's shipping industry, insurance, banking, oil industry and energy sectors. Broadly, all sanctions target dealings with or involving persons and companies designated under the various regimes such as Islamic Republic of Iran Shipping Lines, as well as provision of services (such as shipping, banking and insurance) which support such trade. Furthermore, certain new restrictive measures against Iran directly affect the shipping industry. Sanctions against the shipping industry of Iran caused many of the global insurance companies to revise the providing of insurance services to Iranian ships. In response to these restrictions, Iran’s shipping lines have found alternative means of trading to neuter the sanctions against the country, such as setting up of new companies outside Iran, establishing P&I clubs and changing the names of the owners and ships which are part of these sanctions. The main purpose of this thesis is to examine the effects of the recent sanctions against Iran and discuss their influence on international shipping industry with a focus on the insurance/reinsurance business. In order to get a better understanding of the subject, the thesis provides an overview of the UN, the EU, the United States and various national economic sanctions against Iran and their background, development, scope, purpose and enforcement at various levels. Regarding the impact of them on different sectors of shipping industry, the focus is more on international and the United States sanctions imposed on Iran. The thesis shows how these sanctions affect various shipping contracts. The author describes the subject under four main parts; insurance, charterparties, offshore energy sector and financing and maritime trade. It also discusses how Iran’s government and Iranian ships react against these restrictions. Finally, the author tries to use relevant cases to evaluate the legal implication of sanction clauses in insurance contracts and to determine the effectiveness of such clauses as a tool to shift the sanctions risks. In this regard, the thesis analyses the recent decision of English court of Appeal in the case of Arash Shipping Enterprises Company Limited v Groupama Transport where the court discusses the role of sanction clause in shipping contracts.