Fearful of Banking Restrictions, Shipping Lines Stay Away from Iran
By: Maritime Executive June 03, 2014
Global shipping lines are increasingly shying away from handling cargoes to Iran as restrictions on banking and insurance continue unabated, despite an interim agreement between Tehran and the West that called for limited sanctions relief.
Iran in the past depended on foreign ships for much of its imports, but it is now relying more on land routes and its own commercial fleet. Iran was never barred from buying food or other humanitarian goods under sanctions imposed by the European Union and the United States because of its disputed nuclear program, but the restrictions have hit approved deals as well.
"The principle sanction against non-U.S. companies is that they can be denied access to U.S. banking, and therefore they can't trade in U.S. dollars," said Doug Maag of law firm Clyde & Co. "That is a very real and adverse result."
Global shipping fees are transacted in U.S. dollars, which means dealing with Iran could make companies vulnerable to being frozen out of the U.S. financial system.