Reuters: Two Major Shipping Companies Revise Contracts with Iran

On Friday, Reuters reported that following the U.S. decision to withdraw from the Iran nuclear deal and reimpose sanctions against Tehran, two major shipping companies, Maersk Line and MSC, are revising their contracts with Iran. U.S. President Donald Trump officially announced the country's withdrawal from the JCPOA on Tuesday, following a deadline he set for amending the nuclear agreement, and instructed his administration to implement sanctions against Iran as scheduled. According to the U.S. Treasury Department, these sanctions will be gradually reinstated in two phases of 90 days and 180 days. Now, according to Reuters, MSC, headquartered in Switzerland, stated on Friday that it is 'reviewing and revising its services, operations, and business relationships to determine any impact of the timing announced by the U.S. government.' The company suspended its services from 2012 to 2014 and when it resumed relations with Iran, it used smaller vessels from third-party regional companies to transport goods between Iran and the Jebel Ali shipping hub in the UAE. Reuters quoted a shipping source stating that MSC has stopped accepting orders for transporting certain shipments that may be affected by the sanctions. This week, the U.S. Treasury announced that Washington would impose sanctions on any sale, transfer, and transportation of black lead and raw or semi-processed metals, including aluminum, steel, coal, and industrial production software to Iran or from Iran abroad. In this regard, the Danish company Maersk Line also stated in a separate announcement that it has halted the acceptance of orders for transporting shipments listed by the U.S. Treasury. The company clarified that 'our presence in Iran is limited. We will consider future events and assess their impact on the company's activities.' Maersk Line also used third-party and intermediary companies for transportation between Iran and Jebel Ali in the UAE. Reuters adds that Iran uses maritime transport for importing and selling its non-oil exports and faced issues in this regard even before the lifting of international sanctions in 2016. The Iranian ports and shipping sector, including the Islamic Republic of Iran Shipping Lines and the National Iranian Tanker Company, will again be subject to U.S. sanctions starting November 4. The U.S. government will separately resume sanctions related to maritime transport insurance, which has previously posed another significant challenge for Iran. Each vessel requires multiple different insurances to obtain permission to move and transport goods. Nigel Cardin, Deputy CEO of UK P&I Club, stated that 'this decision is expected to have a significant impact on trade and maritime transport with Iran and the insurance of these services.' Mr. Cardin added that a comprehensive assessment of these impacts may only be possible when all aspects of the issue become clearer and recommended that all companies exercise caution before entering into any shipping contracts with Iran. Meanwhile, according to Reuters, Lloyd's of London has also stated that it is reviewing and assessing the implications of the new situation in its insurance activities. This comes as the governments of France and Germany, the largest economies in Europe, emphasized on Friday that they are taking steps to protect their economic and political interests in Iran. In this context, the French Minister of Finance emphasized the need for Europe to defend its economic interests, stating that France has made proposals in this regard to the European Commission.