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03 Mar 2016 | 
 

Cover provided subject to a requirement for members to perform a due diligence/screening process
Please bear in mind that Iran is a conditional trading area, and all calls to Iran should be reported to DNK in advance.
DNK also requires a confirmation that a due diligence/sanction screening process has been undertaken by Members and that the results of that process can (if necessary) be provided to DNK on request.
There are a number of sanctions and trade restrictions still in force and even though the number of persons on the EU and US SDN lists has reduced, a large number are still listed. They include banks such as Ansar Bank and bank Saderat Iran, as well as IRGC-linked entities such as Tidewater Middle East Co.
Although the following enumeration is not complete, it will give you an idea of prohibited transactions, in which cases cover will ordinarily not be available.
– Transactions involving persons remaining on the EU and/or U.S. Specially Designated and Blocked Nationals (SDN) lists;
– Transactions involving dual use items (goods, software and technology that can be used for both civilian and military applications and/or that can contribute to the proliferation of Weapons of Mass Destruction) and/or other items which are restricted (such as certain software and metals);
– Transactions involving weapons and military goods;
– Transactions with a US “nexus” including:
– Payments in US Dollars (premiums or claims),
– Involvement of US banks or other US Persons and
– Direct or indirect provision of any US-origin goods, services or technology to Iran.
Furthermore, bear in mind that , due to the US primary sanctions remaining in place, US Persons (including US citizens, residents or green-card holders) should not be involved in any way in the day-to-day operation and decision making process of Iranian transactions. Nor may non-U.S. Persons temporarily within the U.S (eg when on vacation) engage in any way in an Iranian related transaction (eg by replying to emails on a mobile device) until they leave the U.S.
DNK require all Members trading to Iran to have undertaken a thorough due diligence process to verify that their counterparties, other Iranian entities involved in the transaction and type of trade is not affected by any relevant sanction regime, and kindly asks members to advise us on the assessment that the shipowner/operator/manager has undertaken in respect of the subject operation.
We would kindly remind you that the DNK standard insurance conditions include a clause (Clause 4), which states that DNK shall not be deemed to provide cover and the Association shall not be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit may expose the Association to any sanction (cf. Cl.4 of the DNK insurance conditions). Hence, insurance cover under the war risk insurance will be jeopardised if the member vessel is engaged in activity prohibited by, or in any other way inconsistent with, a sanction regime.
Please bear in mind also that even if a call to an Iranian port is not in breach of sanctions as such, DNK might be unable to assist and to settle claims as a result of, for instance, a claimant (company or individual) being listed as prohibited. You should consider the availability and suitability of alternative insurance or other arrangements (including contractual provisions) to address these risks.
Please find herewith a few examples (although not exhaustive) of procedures that should be included in the due diligence process.
– Customer checks and other due diligence against charterers, sub-charterers, shippers, receivers, cargo owners and others involved in the shipment (companies and individuals).
– Cargo checks and other due diligence insofar as prohibited cargo or cargo movement is concerned.
– Transaction checks and other due diligence against banks, mortgagees and others involved in relevant transactions (companies and individuals).
– Bunker, supplies, spares etc. checks against relevant suppliers (companies and individuals).
– Retain documentation of the due diligence process.
We kindly ask you to confirm that a due diligence/sanction screening has been carried out and that the subject operation, based on such a due diligence/sanctions screening, is consistent with any sanctions regime applicable in respect of the voyage in question.
In addition, as Iranian related sanctions could be re-imposed under “snapback” provisions (in the event that Iran does not comply with the terms of the JCPOA) all risks with Iranian exposure must contain a suitable sanctions clause.

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