The Club must clearly act in accordance with OFAC, CISADA and Regulation 961. This means that the

Club cannot insure:

• an OFAC prohibited transaction
• the Iranian government or any of the persons, entities or bodies prohibited under Regulation 961.

Further the Club cannot do anything which could be construed as:

• "facilitation" of an OFAC prohibited transaction
• a "sanctionable activity" for the purposes of CISADA
• assistance in the supply of prohibited goods as defined by Regulation 961.

These constraints turn on "assistance" (or "facilitation") and will certainly all be widely construed to extend, for example, to advice on, or investigation of, a claim which is tainted by a breach of OFAC, CISADA or Regulation 961.

Finally, the Club must act in accordance with the transfer of funds rules set out in Regulation 961. The purpose of this Circular is to draw Members' attention to the fact that the Club's policies must be understood and interpreted for cover purposes in this light.

The Club Rules at G1:9.7 (or N20:9.8) read as follows:

You are not insured for risks arising from your involvement in illegal trade - about which you knew or reasonably should have known "Illegal trade" is defined at G6:2 (or N25:2) as: handling, movement, storage of, or transaction in, people, goods, cargo or money in the course of trade which is prohibited by national law or international agreement/convention

This is sufficient to restrict your policy, and the Club's activities, to what is permitted by OFAC, CISADA and Regulation 961. However, for the avoidance of doubt, policies going forward will be endorsed as follows:

1) We do not cover and will not be liable to pay any claim or provide any benefit to the extent that this would expose us to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America

2) Any certificates or other evidences of insurance certifying or evidencing coverage for any transaction, shipment, or claim in violation of any of the resolutions or sanctions specified at 1 above will be null and void.

This Circular has been prepared with professional legal input from the United States and the European Union. However, it is not a substitute for specific legal advice which must remain the responsibility of Members and brokers.