[241012.EN.BIZ] EU regulations makes legitimate business with Iran even more difficult

THE European Union has announced more restrictive measures against Iran, making legitimate trade even more difficult, warns London law firm Holman Fenwick and Willan.

Under European Council Decision 2012/635/EC, a further 34 entities, mainly in the oil and gas sector, have been added to the list entities subject to the asset freeze, reported London's TankerOperator.

They now include National Iranian Oil Co (NIOC), National Iranian Drilling Co (NIDC), Iranian Oil Terminals Co (IOTC), Naftiran Intertrade Co (NICO), National Iranian Tanker Co (NITC), National Iranian Gas Co (NIGC), Petropars, the Iranian Ministry of Energy and the Iranian Ministry of Petroleum.

Companies, trading directly or indirectly with Iran where there is an EU connection, or involved in the oil and gas sector, tanker construction, naval equipment, technology, or which supplies graphite and related metals should immediately obtain legal advice, said the law firm, adding that the regulations also apply to banks and insurers.

An implementing regulation is still required to make these new measures binding and the timing remains unclear, but Regulation 945/2012 has immediate effect in expanding the EU asset freeze.

Once implemented, the new measures will prohibit the purchase, import or transport of natural gas from Iran as well as the sale, supply or transfer to Iran of graphite, and raw or semi-finished metals such as aluminium and steel, plus software for integrating industrial processes are relevant to industries either controlled by the Iranian government, or related to Iran's nuclear programme.

It will also prohibit the sale, supply or transfer to Iran and Iranian or Iranian owned enterprises of key naval equipment and technology for shipbuilding, maintenance or refit.

The regulation will also prohibit the provision of flagging and classification services to Iranian ships, prohibit the supply of vessels designed for the transport or storage of oil and petrochemical products to Iranian entities or others transporting or storing Iranian oil or petrochemicals.

It will also prohibit the construction of new oil tankers for Iran or for Iranian entities, ban transactions between EU banks and Iranian banks and financial institutions unless authorised in advance by the relevant member state.

The latest decree also amends the provisions concerning the freezing of funds and economic resources of the Central Bank of Iran.

Holman Fenwick and Willan said the provisions will apply to transactions by EU nationals, EU entities within the EU and to the use of vessels or aircraft under the jurisdiction of the EU.

The law firm said that "grandfather" clauses exist, allowing contracts to run for a short period, but companies, which are involved in the above activities, will nonetheless need to put in place robust compliance procedures.

Source : HKSG, 24.10.12.