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page37BRUSSELS/TOKYO--EU diplomats are debating whether to exempt some insurers from a ban on dealing with Iranian oil shipments after Asian oil importers lobbied for exceptions to ensure oil deliveries, government and industry sources said on Friday.

Diplomats in the European Union are divided on the issue before EU foreign ministers meet on March 23, said one EU diplomat. "At the moment, there is no agreement on this."

The wrangling shows the difficulty of achieving consensus on how to isolate Iran over its suspected nuclear weapons programme. Tehran denies Western charges, saying its nuclear programme is for peaceful purposes such as power generation.

The EU agreed an oil embargo on Jan. 20 to stop members from importing Iranian oil from July. The embargo also specified a ban on EU insurers and reinsurers from indemnifying vessels carrying Iranian crude and fuel anywhere in the world. Europe's insurers cover the majority of the world's global oil tanker fleet, and the ban could prevent Iran's biggest crude buyers in Asia from importing Iranian crude.

"We argue that this regulation applies too broadly as it also hits non-European companies," said a South Korean government source with direct knowledge of the matter. "We could fail to receive Iranian crude from July 1 if no solution is reached," he said.

The chief executive of the Indian National Shipowners Association (INSA) said it had asked the EU to allow its P&I club to contine providing insurance cover for voyages to Iran. "We have written to the EU that P&I cover should continue for the Indian vessels," Anil Devli told Reuters.

After the January agreement, EU talks on the implementation of the ban led at first to a clause excluding certain types of insurance, according to a discussion document seen by Reuters. The document, dated Feb. 20, said: "It shall be prohibited ... to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and re-insurance, except for third party liability insurance and environmental liability insurance."

That exemption might have made it easier for shippers to meet Asian importers' national laws requiring insurance. But it is unclear whether such an exemption will be maintained. The exemption clause had been deleted from the discussion paper on Thursday, said the EU diplomat, but would be up for discussion again on Monday.

page37BRUSSELS/TOKYO--EU diplomats are debating whether to exempt some insurers from a ban on dealing with Iranian oil shipments after Asian oil importers lobbied for exceptions to ensure oil deliveries, government and industry sources said on Friday.

Diplomats in the European Union are divided on the issue before EU foreign ministers meet on March 23, said one EU diplomat. "At the moment, there is no agreement on this."

The wrangling shows the difficulty of achieving consensus on how to isolate Iran over its suspected nuclear weapons programme. Tehran denies Western charges, saying its nuclear programme is for peaceful purposes such as power generation.

The EU agreed an oil embargo on Jan. 20 to stop members from importing Iranian oil from July. The embargo also specified a ban on EU insurers and reinsurers from indemnifying vessels carrying Iranian crude and fuel anywhere in the world. Europe's insurers cover the majority of the world's global oil tanker fleet, and the ban could prevent Iran's biggest crude buyers in Asia from importing Iranian crude.

"We argue that this regulation applies too broadly as it also hits non-European companies," said a South Korean government source with direct knowledge of the matter. "We could fail to receive Iranian crude from July 1 if no solution is reached," he said.

The chief executive of the Indian National Shipowners Association (INSA) said it had asked the EU to allow its P&I club to contine providing insurance cover for voyages to Iran. "We have written to the EU that P&I cover should continue for the Indian vessels," Anil Devli told Reuters.

After the January agreement, EU talks on the implementation of the ban led at first to a clause excluding certain types of insurance, according to a discussion document seen by Reuters. The document, dated Feb. 20, said: "It shall be prohibited ... to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and re-insurance, except for third party liability insurance and environmental liability insurance."

That exemption might have made it easier for shippers to meet Asian importers' national laws requiring insurance. But it is unclear whether such an exemption will be maintained. The exemption clause had been deleted from the discussion paper on Thursday, said the EU diplomat, but would be up for discussion again on Monday.