Dubai: Local trade links with Iran have run into another hurdle with regulators in various countries calling on insurance companies under their supervision to cease all transactions with Iran-based insurers. It also applies to other companies based in Iran.
This comes as a consequence of the UN-imposed financial sanctions against the country, but it is only now that the impact is starting to be felt at the local trade level. Obviously, this will directly weigh on any and all movement of goods into Iran.
"They have made all such contact with Iranian companies come under rigorous scrutiny," said a senior insurer with a local firm with long-standing exposure to marine cargo heading into Iran.
"Where the local economy is concerned, there will be a ripple effect from it."
Insurance industry sources also say that a month's notice has been issued for cancellation of existing marine "open cover" contracts. (Open cover is an annual contract by which an insurer agrees to offer coverage for all consignments to be shipped during the next 12 months.)
However, insurance industry sources are quick to point out that all options and conditions are being looked into.
"The circulars have been received by insurers and shipowners informing of the implementation of UN sanctions.
"The Shipowners Mutual is advising shipowners to refer the matter to lawyers, who are now looking into the full implications. Of course, it will take a few days to have clarity. Until then, there will be different stories coming from different quarters. But everyone needs to show some patience."
