U.S. Treasury sanctions are making it harder for Islamic Republic of Iran Shipping Lines (IRISL) to get P&I cover.
Yesterday, the Treasury designated Moallem Insurance Company under Executive Order 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, and isolating them financially. Designations under E.O. 13382 prohibit all transactions between the designees and any U.S. person, and freeze any assets the designees may have under U.S. jurisdiction.
Moallem Insurance Company was designated for providing marine insurance to IRISL vessels.
According to the Treasury, IRISL plays a key role in Iran's efforts to advance its missile programs and transport other military cargoes. The Treasury says that the enhanced focus of U.S. and international sanctions on IRISL's illicit activities and deceptive practices has, among other things, led IRISL to default on commercial loans and has made it increasingly difficult for Iran to maintain insurance coverage on IRISL ships. As a result, IRISL has been unable to operate with its full fleet of ships.
In October 2009, the U.K. froze all business ties with IRISL under its counter-terrorism authorities, effectively denying IRISL the ability to continue receiving insurance coverage and other services from UK-based P&I clubs. IRISL then sought insurance coverage from other European providers and P&I clubs that declined to provide this business in light of the recent U.K. action. For a short period, IRISL obtained insurance coverage from a Bermuda-based P&I club until the government of Bermuda enacted a law in January 2010 to mirror the U.K. action, forcing IRISL out of the Bermuda insurance market. In early 2010, IRISL was forced to turn to Tehran-based Moallem Insurance Company, which was not previously in the business of providing maritime insurance.