Insurance ruling could impact SA-bound vessels from Iran

The decision by maritime insurers to suspend coverage for Iranian vessels may affect the ability of cargo ships from that country to dock in SA if Transnet National Ports Authority refuses statesponsored insurance with a liability cap of US $1 billion. Lloyd’s of London last week stopped underwriting tankers importing fuel into Iran following recent US sanctions that penalise companies doing business there. The UN imposed a new round of sanctions against Iran at the same time. However, it is the American sanctions that are causing insurers to weigh the risk of doing business with Iranian ships at the expense of US penalties. Lloyd’s choice has been typical. As explained in a statement by Sean McGovern, general council for the firm, “Lloyd’s will always comply with applicable sanctions. The US is an important market for Lloyd’s and, in recognition of this, the market will not insure or reinsure refined petroleum going into Iran.” Most ports will not permit entry for uninsured vessels, requiring protection and indemnity coverage against mishaps that may occur. With Iran’s commercial maritime fleet potentially shut out of many ports, the Tehran government has stepped in as an insurer of last resort. However the compensation it offers is considered insufficient by some maritime observers. Calls to the Iranian embassy in Pretoria were not returned. However, such countries as Russia, China and India are known to oppose the US sanctions and will allow Iranian vessels insured by the state to dock. In a statement, the Islamic Republic of Iran Shipping Lines (IRISL) said it would continue to seek out ports willing to accept its 160 vessels.