Crude oil, petroleum and petrochemical products
The Council Decision prohibits the import, purchase or transport of Iranian crude oil, petroleum products and petrochemical products by EU entities, along with the provision of financing, financial assistance, or insurance and reinsurance in relation to these matters.
The phrases “Iranian”, “crude oil”, “petroleum products” and “petrochemical products” are not defined in the Council Decision and it is likely that the further Regulation will contain more detailed definitions. The definition of “Iranian” will be particularly important in determining the potential impact of the Regulation. The Recitals suggest that the definition will most likely be limited to crude oil, petroleum and petrochemical products from Iran itself. However, it is possible that the definition will go further to cover any Iranian owned or controlled entity (which could potentially include a joint venture) wherever it may be located worldwide.
With regard to Iranian crude oil and petroleum products, the Council Decision includes transitional provisions which provide that contracts concluded before 23 January 2012 can still be performed up to 1 July 2012, and contracts related to Iranian petrochemical products can still be performed up to 1 May 2012.
There is also an exception which allows for debt obligations owed by Iranian entities arising from contracts concluded before 23 January 2012 to be honoured by the supply of Iranian crude oil, petroleum products and petrochemical products or the proceeds derived from their supply.
The existing prohibition on the export of key equipment and technology to the Iranian “oil and natural gas industry”, along with related technical assistance and financial assistance, has been broadened in the Council Decision so as to also include the same prohibition in respect of the Iranian “petrochemical industry”. The meaning of the term “petrochemical industry” is not yet clear. However, a more detailed definition is likely to be included in the further implementing Regulation, along with a further Annex setting out details of the prohibited equipment and technology.
The broader prohibition in respect of the petrochemical industry will not affect the delivery of goods provided for in contracts concluded before 23 January 2012 or the performance of obligations arising from contracts concluded before 23 January 2012 relating to investments made before the same date.
The provision of finance, acquisition of participating shares and/or securities or the creation of a joint venture with companies in the Iranian “oil and gas industry” has also been extended to include the Iranian “petrochemical industry”. Again such prohibition will not affect contracts concluded before 23 January 2012 or extensions of participations which are due to obligations under contacts concluded prior to 23 January 2012.
Trade in gold, precious metals and diamonds with Iranian public bodies and the Central Bank of Iran is prohibited, along with the delivery of Iranian-denominated banknotes and coinage to the Central Bank of Iran.