UK: Iran Sanctions Update - October 2012

Last Updated: 29 October 2012
Article by Michelle Linderman, Jonathan Reese and James Rose

On 16 October 2012, the European Union ("EU") introduced further sanctions against Iran. In this update, we look at some of the most significant new restrictions that will impact international trade and shipping.

EU Council Decision 2012/635

On 16 October 2012, the EU published Council Decision 2012/635 (the "Decision") that introduces new restrictions on trade with Iran, as well as amending some of the existing restrictions (outlined in our previous updates, see links at end of article).

The Decision is only binding on the EU Member States and does not bind individuals and entities. It is anticipated, however, that the restrictions outlined in the Decision will, subject to any amendments that the EU may deem fit to make, be incorporated into an implementing Regulation in due course which, once published, will bind individuals and entities.

Natural gas

The Decision sets out a prohibition on dealing with Iranian natural gas similar to the existing prohibitions relating to Iranian crude oil, petroleum and petrochemical products. The Decision prohibits:

  • the import, purchase or transport of Iranian natural gas; and
  • the direct or indirect provision of financing or financial assistance, including (re)insurance and brokering of the same, related to the import, purchase or transport of Iranian oil.

It would appear that no grace period for the performance of existing contracts will be included in the new prohibitions on dealing with Iranian natural gas and, as such, the restrictions will, upon the publication of an implementing regulation, apply to all contracts immediately.


The Decision prohibits:

  • the sale, supply or transfer to Iran of metals that are relevant to the industries controlled directly or indirectly by the Iranian Revolutionary Guard Corps ("IRGC") or that are relevant to Iran's nuclear, military and ballistic missile programme;
  • the provision to Iran of technical assistance or training and other services related to the prohibited metals; and
  • the provision to Iran of financing or financial assistance for the sale, supply or transfer of the above metals and the provision of related technical assistance or training.

The Decision gives the following examples of metals that this prohibition is intended to target: "graphite, and raw and semi-finished metals, such as aluminium and steel".

These examples, however, are not exhaustive and, until an implementing Regulation is published, it is difficult to say which other metals will fall within the scope of this restriction. Guidance will also be required as to the industries that are controlled directly or indirectly by the IRGC or that are relevant to Iran's nuclear, military and ballistic missile programme.

It is anticipated that, as with previous EU Regulations on Iran, the Regulation that implements the restrictions in the Decision will include detailed annexes that will clarify the subject matter of the restrictions.

The Decision provides that the restrictions relating to metals shall be without prejudice to the execution, until 15 April 2013, of pre-16 October 2012 (the date of the publication of the Decision) "contracts or ancillary contracts necessary for the execution of such contracts".

The wording of the Decision here is similar to that which was used in Decision 2012/35 of January this year, which introduced the restrictions on dealing with Iranian oil.

In the Regulation which implemented Decision 2012/35, however, the wording was slightly amended by the insertion of the word "trade" in front of "contracts". This amendment served to narrow the scope of the exception so that it applies solely to sale and purchase contracts and not to other commercial contracts such as, for example, long term charterparties. It is possible that a similar amendment will be made when the Regulation implementing the Decision is published.

Shipbuilding and maintenance

The Decision prohibits:

  • the sale, supply or transfer of key naval equipment and technology for shipbuilding, maintenance or refit to Iran or to Iranian or Iranian-owned enterprises engaged in this sector; and
  • the use of vessels or aircrafts under the jurisdiction of Member States to perform any of the above activities.

An exemption from the above prohibitions shall be available in the event of a non-Iranian owned or controlled vessel being forced into an Iranian port or Iranian territorial waters under force majeure.

The above prohibitions will be subject to a grace period which runs until 15 February 2013 for the execution of pre-16 October 2012 contracts and ancillary contracts necessary for the execution of such contracts. As with the grace period for contracts involving restricted metals (please see above), in our view it is possible that the scope of this temporary exemption will be restricted to "trade" contracts.

As with the prohibitions relating to metals, the EU is yet to define the scope of "key naval equipment and technology". Whilst it is anticipated that the implementing Regulation will define these terms, for the moment, precisely what this restriction is intended to prohibit is uncertain.

The Decision also prohibits:

  • the construction or participation in the construction of new oil tankers for Iran or Iranian persons and entities; and
  • the provision of technical assistance or financing or financial assistance in relation to the construction of new oil tankers for Iran or Iranian persons and entities.

Vessels used for storing oil

The Decision prohibits:

  • the supply of vessels designed for the transport or storage of oil and petrochemical products to Iranian persons, entities or bodies; and
  • the supply of vessels designed for the transport or storage of oil and petrochemical products to any person, entity or body for the transport or storage of Iranian oil and petrochemical products.

The existing restrictions on the import, transport and purchase of Iranian crude oil, petroleum and petrochemical products did not expressly prohibit the use of vessels to store these products. There was, accordingly, some confusion as to whether or not using vessels as floating storage tanks was prohibited, but this has now been clarified by the Decision.

Flagging and classification services

The Decision prohibits the provision of flagging and classification services to Iranian oil tankers and cargo vessels from 15 January 2013.

Transactions with Iranian banks

The Decision prohibits EU financial institutions from entering into, or continuing to participate in, transactions with:

  • Iranian banks;
  • branches and subsidiaries of Iranian banks wherever located; and
  • financial entities controlled by persons and entities domiciled in Iran.

Such transactions will, however, be permissible if authorised in advance by the relevant Member State. Authorisation will only be granted in relation to certain, specified types of transaction, for example those relating to foodstuffs, healthcare, etc.

The UK authorities introduced national legislation in November 2011, which already includes wide-ranging prohibitions on UK financial entities dealing with Iranian banks. This latest EU Decision will bring other EU Member States into line with the UK position.

EU Regulation 954/2012

EU Regulation 954/2012 was agreed alongside the Decision and implements the asset freezes contained in the Decision by amending the list of Iranian persons and entities subject to the EU's asset freeze. The Regulation added one individual and 34 entities mainly connected with the Iranian oil and gas sector to the EU's list of sanctioned persons. Among the most notable of these additions are:

  • the Ministry of Energy;
  • the Ministry of Petroleum;
  • National Iranian Oil Company ("NIOC ") (and many of its subsidiaries); and
  • National Iranian Tanker Company ("NITC ").


The restrictions introduced by the Decision and the addition of the various entities subject to the EU's asset freeze will make trade with Iran even more difficult. Those engaged in contracts with Iranian entities, particularly those who deal with any of the newly listed oil and gas companies, will need to consider whether they are still able to continue doing business with those entities. If they have any EU connection, it is likely that the restrictions will prevent further dealings or limit the time frame within which business may be completed. It is recommended that you seek legal advice as soon as possible if you are concerned that any of the new restrictions, when implemented, will affect you or your company. against-iran-update-june-2012 update-may-2012

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.