South Korea to sidestep EU ban on maritime insurance coverage

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Ban on oil- insurance newsSouth Korea to resume providing coverage next month

South Korea plans to sidestep sanctions imposed against Iran by the European Union and will continue to provide the country with maritime insurance coverage beginning next month. South Korea is the latest Asian country that has chosen to ignore the sanctions, which have instituted a ban on providing ships carrying Iranian oil with insurance coverage. The sanctions have been subjected to a great deal of criticism because of their potential to cause economic damage. The maritime insurance that South Korea provides is expected to help ensure oil continues to reach Asian countries.

EU sanctions impact Asian countries

The EU sanctions have impacted China, India, Japan, and South Korea, putting strain on these countries in terms of energy and economics. The four countries have emerged as stringent opponents of the sanctions, along with the United Kingdom, claiming that the sanctions create unjustifiable economic risk. As such, the countries have chosen to ignore the sanctions and continue to provide Iran with the insurance coverage that it needs to ensure oil transports.

South Korea’s move complies with U.S. guidelines

Despite the move to sidestep the maritime insurance ban, South Korean officials claim that their supply of insurance coverage will adhere to guidelines established by the Obama administration. Officials note that the amount of oil South Korea requires falls in lines with the suggested guidelines provided by the U.S. government. As such, the country is not expected to experience any backlash for providing maritime insurance coverage for ships carrying Iranian oil.

Maritime insurance coverage continues to be a hot issue

Earlier this month, Iran announced that it will be providing maritime insurance coverage for shipping companies transporting oil. This is meant to ensure that countries in need of oil will have a steady stream of the fuel. The EU sanctions were enacted against the country in July and are linked to Iran’s controversial nuclear program. Thus far, the United Kingdom, who holds the lion’s share of the maritime insurance market, has been the strongest opponent of the sanctions.

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