Shipowners must carry out constant due diligence to manage sanctions risk

In a view from a P&I Club, Ursula O’Donnell, of the Standard Club, considers the impact of the EU and Chinese Blocking Regulations.

EU Blocking Regulation

The EU Blocking Regulation (Council Regulation (EC) No 2271/96) was first adopted in 1996 to counteract the impact of US sanctions against Cuba, Iran and Libya, but was rarely enforced. It came back into the spotlight in May 2018 when the US pulled out of the Joint Comprehensive Plan of Action (JCPOA), otherwise known as the “Iran nuclear deal”, and re-imposed secondary sanctions against Iran targeting the energy, banking and shipping sectors, among others. US primary sanctions which apply to US persons remained in effect under the JCPOA. US secondary sanctions (otherwise known as extraterritorial sanctions) apply to non-US persons in third-party countries with no US nexus. However non-US persons may also become subject to US sanctions if they provide “material support” to sanctioned parties or “knowingly facilitate” significant transactions with them.