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U.S. sanctions seen barring IT platform of insurer Lloyd's for Iran trade

Reuters  |  LONDON 

By and Jonathan Saul

LONDON (Reuters) - New U.S. sanctions are likely to prevent the use of a of London IT platform for any insurance, adding to difficulties for European insurers providing cover for the country.

European insurers, reinsurers, brokers and shipping firms have been winding down Iranian business as the reimposes sanctions on and reinsurance from Nov. 4 after withdrawing from a nuclear deal with in May.

of London and other European insurers provided marine, and trade credit cover for after the lifted secondary sanctions in January 2016 following a nuclear deal between world powers and Iran reached in 2015. The also lifted sanctions in January 2016.

Lifting secondary sanctions meant European firms could trade with Iran without being penalised by the It also allowed foreign subsidiaries of U.S. firms to trade with Iran.

told the re-imposition of sanctions meant insurers "probably" would not be able to process Iran-related business through the Lloyd's platform, partly owned since last year by U.S. firm .

"You can do it through Lloyd's through other settlement mechanisms outside DXC, it's just more complicated and more expensive to do it that way," he said.

"There is a bit of an evaluation going on about what business opportunities there are, in any event."

A Lloyd's said it had advised syndicates "to consider obtaining legal advice before engaging in Iran-related activities, to assess and mitigate their sanctions risk".

provides and other back to Lloyd's and other London insurers through two firms, and XCS, that are jointly owned by DXC's British subsidiary Xchanging, Lloyd's and the International Underwriters' Association.

The (OFAC) last month revoked licences which had allowed foreign subsidiaries of U.S. firms to trade with Iran.

"DXC, Xchanging, and our JV (joint venture) partners are evaluating the impact ... on the continued ability of and to process Iran-related premiums and claims, and the timing of processing changes required during the wind-down period," said in an e-mailed statement.

It said a "wind-down" licence issued by OFAC at the end of June gave firms until November to phase out their Iran-related activities. "and will issue guidance to the market in the near future," DXC said.

Lloyd's insurers and brokers with Iran business included Chaucer, Ed Broking, RFIB and UIB, sources told

Chaucer, Ed Broking and RFIB declined to comment. UIB did not respond to a request for comment.

TRADE DISRUPTION

Iran's economy, heavily reliant on its that wants to shut down with sanctions, needs marine to ensure the smooth flow of maritime trade for both its exports and imports.

Efforts to upgrade Iran's creaking also require insurance, alongside investment capital.

had faced logistical difficulties until Western sanctions were lifted after the 2015 nuclear deal.

Responding to the U.S. decision to withdraw from the nuclear pact, insurer said in May it planned to wind down its "minimal" amounts of Iran business and French reinsurer said on Friday it would not write new Iran business or renew business.

Other European insurers and reinsurers with Iran business include France's AXA, Germany's Munich Re, and European subsidiaries of U.S. firms Gallagher and PartnerRe, according to sources and company filings.

said it had insured shipping and shipments for Iran by non-Iranian parties following the 2015 nuclear deal, but has suspended taking new contracts for such

When asked by Reuters, Swiss Re, Gallagher and said they were assessing the sanctions situation. declined to comment.

Renewed sanctions on Iranian port operators could also make it "practically impossible for vessels to call at and use Iranian ports", said Andrew Bardot, of P&I Clubs.

is an association of customer-owned ship insurers which protect 90 percent of the world's ocean-going fleet against pollution and claims.

European ship classification firms LR, and said they were evaluating the implications of the sanctions.

Without verification from such bodies, ships are not allowed to call at international ports or to secure insurance.

(Additional reporting by in New York, Inti Landauro in Paris and Bernardo Vizcaino; Editing by and Elaine Hardcastle)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, July 14 2018. 00:11 IST
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