TT Talk - EU REGULATION 961/2010
Regulation 961 is directly applicable in all Member States of the EU and applies to:
- EU nationals (whether inside the EU or not)
- entities incorporated in an EU state (this includes the Club)
- entities in respect of business done wholly or partly within the EU
For these purposes the EU is generally expanded to include the Channel Islands and the Isle of Man. Regulation 961 impacts in particular on insurance, prohibited goods and transfer of funds.
Under Regulation 961 is it prohibited to provide insurance (and reinsurance) to:
- the Iranian Government
- Iranian persons, entities or bodies
- persons, entities or bodies acting on behalf or at the direction of the above.
It is also prohibited to participate knowingly in activities the object or effect of which is to circumvent the above prohibition.
Please also note the following:
- The prohibition does not apply to insurance policies concluded before 27 October 2010, but will apply to extensions and renewals of those contracts.]
- The prohibition does not extend to insurance of owners of vessels (and vehicles and aircraft) chartered to the Iranian Government or Iranian entities (except for those listed in certain of the Annexes to the Regulation).
- The Club's advice is that entering into a contract of carriage with an Iranian entity as a forwarder or carrier will not of itself amount to "acting at the direction of" the entity for these purposes, and that we may therefore insure Members for liabilities arising from this (as long as, of course, prohibited goods are not carried).
Prohibited goods relate to the nuclear and oil and gas industries, military equipment and internal repression. They are defined in Annexes to the Regulation which are extremely complicated and include "dual use" (ie: things which might or might not be used for prohibited purposes). However, common sense will in most cases identify what is likely to be caught by the definition. This prohibition extends to:
- sale or supply
- transport to and from Iran - including a requirement to supply pre-arrival and pre-departure information and liability to inspection
- bunkering, servicing and supply of ships and aircraft owned or controlled by Iranian persons, entities and bodies
- financing or financial, technical and broking assistance
Transfer of Funds
Transfer of all funds to or from an Iranian person or entity, regardless of its location, or to a person or entity directly or indirectly controlled by an Iranian person, must, depending on the amount, either be authorised in advance or reported afterwards. (The relevant thresholds are generally €40,000 and €10,000 respectively.)
Regulation 961 requires EU states to devise appropriate "dissuasive" penalties for failure to comply. The UK has prescribed two years imprisonment (and/or a fine).