American Club Circular No. 19/12 1 JUNE 28, 2012 CIRCULAR NO. 19/12 TO MEMBERS OF THE ASSOCIATION (PARTICULARLY THOSE DOMICILED IN THE EU) Dear Member: IRAN SANCTIONS-EU COUNCIL REGULATION 267/2012-EXPORTS OF CRUDE OIL AND PETROLEUM PRODUCTS FROM IRAN - PROHIBITIONS WITH EFFECT FROM JULY 1, 2012. PROHIBITIONS ON INSURANCE COVERAGE AND TRANSPORTATION. Members have previously been informed through Club Circular No. 07/12 of January 26, 2012, and by FAQs (Frequently Asked Questions) prepared by the International Group, of the impact of EU Iran sanctions prohibiting the transportation of cargoes of crude oil and petroleum products originating from Iran, and on P&I cover therefor once the EU prohibitions become effective on July 1, 2012. While there has been some speculation in the media of a possible deferral of the implementation date for the prohibitions, the Council of the European Union issued a press release on June 25 (as attached) confirming that the exemptions relating to pre-January 23, 2012 contracts for importing and transporting Iranian oil and the provision of P&I insurance cover for the transport of Iranian oil by EU regulated insurers will cease, and such activities will be prohibited (as provided for under the EU regulation), with effect from July 1, 2012. Although the American Club is not an EU-regulated insurer and not subject to the EU’s Iran sanctions, the US sanctions against Iran, to which the American Club is fully subject, like the EU prohibitions, generally prohibit the American Club from providing P&I coverage for the transportation of petroleum and petroleum products from Iran, irrespective of the domicile or identity of its Members or the destination of the cargo. Members who are US persons are prohibited by US sanctions from trading with Iran. Although the EU prohibition referenced above, which takes effect on July 1, 2012, would not apply to, and thus would not prohibit, American Club Members domiciled outside the EU, or those not subject to EU laws and regulations, from transporting crude oil and petroleum products from Iran as long as such cargoes were not destined for the EU, insurance coverage therefor would not be available from EU-based insurers as of July 1, 2012. Insurance coverage for crude oil and petroleum product shipments is also not available from the American Club pursuant to US Iran sanctions laws. EU-domiciled Members are encouraged to exercise due diligence to ensure that they do not transport oil and petroleum products from Iran in violation of the foregoing EU prohibition, and are reminded that the American Club also does not provide P&I coverage for such transportation. Such preventive measures and due diligence are necessary since any voyage or trade performed in violation of the EU and US prohibitions may constitute risks excluded by the American Club’s Rules: See Class I, Rule 3, Section 1.3 through 1.5. American Club Circular No. 19/12 2 Trade and insurance prohibitions Pursuant to the provisions of Articles 11 1 (d) and 12 (2) of the EU regulation, EU-based insurers will be prohibited from providing cover to any insureds in respect of voyages transporting crude oil or petroleum products if they originate in Iran regardless of whether the final destination of the cargo is within or outside the EU. US sanctions law imposes a similar prohibition on the American Club. A related EU ban in respect of the transportation of Iranian petrochemical cargoes, and the insurance thereof, entered into