The EU continues to seek new ways to tighten sanctions on Iran and put pressure on Tehran to scale back its nuclear work. On 15 October, the EU adopted further sanctions against Iran by banning the import of natural gas from Iran into the EU (import, purchase, transport and related insurance and finance). Iran is the second largest producer of natural gas producing roughly 15% of the world’s supply.
The EU Council Decision 2012/635 was published on 16 October. This Decision also provides that EU-owned vessels may no longer be used for transporting or storing Iranian oil, and flagging and classification services for Iranian oil tankers and cargo vessels are also banned.
The issue of storage was left unclear in the previous Council Decision concerning oil and petrochemicals. The latest Decision clarifies this by specifying that the supply to Iranian persons/entities of vessels designed for the transport or storage of oil and petrochemical products is prohibited.
The Council Decision itself is binding on Member States. As with previous Council Decisions relating to oil and petrochemical products, it will require implementing legislation in each Member State. Until then it will not be binding on individuals and entities and the final wording will not be certain.
The Council Decision does contain a ‘grace period’ to April 2013 for existing contracts to lift natural gas. Those with long-term contracts should therefore ensure they are ready for the impending legislation which will bring an abrupt halt to this trade. This implementing legislation may be expected in the next few months.
Further, the EU has added to its list of sanctioned entities. Some of these entitles are already on the US OFAC list. They include the Iranian Ministry of Energy; Iranian Ministry of Petroleum; National Iranian Oil Company and its subsidiaries; National Iranian Tanker Company and National Iranian Gas Company.