Section 4 Sanctions

11.4.1 General

Since 2010 there has been a considerable increase in the number of international sanctions imposed by, amongst others, the United Nation, the European Union, the U.K. and the U.S.A. These sanctions, such as those imposed against Iran, influence international trade and in particular the maritime industry and can prevent Members’ access to insurance cover. Trade to and from countries which are subject to such sanctions exposes the Member to substantial risks. Not only can cover be prejudiced under Rule 11 Section 4 but the trade may also be deemed illegal under Rule 27 (e) with the consequence that P&I cover ceases altogether. Members are obliged to satisfy themselves that their trading activities are not in breach of any applicable sanctions or prohibitions. See the comments under

11.4.2 Payment of claims

Under (a) of this Rule cover is excluded for claims where payment of such claims would expose the Club to any risk of sanction, prohibition or adverse action by any state or organisation. Furthermore, Members facing claims in countries subject to sanctions run the risk that the Club will be unable to provide security or make payments to those claims. It is therefore of utmost importance that Members satisfy themselves that their ships are not in breach of any applicable sanctions.

11.4.3 Recoveries from reinsurers

Similarly, under (b) if the Club is unable to recover part of a claim from reinsurers or parties to the Pooling Agreement because of sanctions legislation, then Members’ claim may not receive full indemnity from the Club. This protects the Club from any shortfall of recovery from the Pool or reinsurers if another Club in the Group Clubs or a reinsurer refuses to pay by reason of a sanction risk to which it is exposed. A shortfall in this respect is the same as if reinsurers have to pay funds into a designated account to satisfy any state authority or organisation. If a shortfall is later recovered from reinsurers the exclusion under this Rule will cease to apply.