Japan readies bill for sovereign cover of Iran oil imports

Japan readies bill for sovereign cover of Iran oil imports

Japan's Iran crude imports dive in April

Japan is preparing to submit a bill to parliament as early as this week to enable its government to provide cover for tankers bringing in Iranian crude once a European Union ban on insurance takes effect on July 1, Japanese officials said on Tuesday.

June 5, 2012 5:24 by Reuters

Like South Korea, Japan has been lobbying the EU to continue to be exempted from the ban on insurance and reinsurance of Iran’s oil exports, which is part of a raft of Western sanctions aimed at shrinking Tehran’s oil revenues to force it halt its controversial nuclear programme.

But Japan’s transport ministry is now preparing a bill covering a sovereign insurance scheme to get round the European Union sanctions, and which cabinet ministers are expected to approve as early as this week, the officials said.

The scheme would enable the Japanese government to directly make the insurance payments necessary in case of a critical incident, said one official, who declined to be identified as he is not authorised to talk to the media.

Japan wants to maintain crude imports from Iran in line with demands from the country’s buyers of Iranian crude. A cabinet reshuffle this week in favour of the major opposition parties has increased chances of early approval of any bill in a divided parliament.

“Despite preparing the bill, we are continuing to lobby the European Union,” said another government official.

“Even if the European Union permits the exemption for Japan, and the preparation proves fruitless, we wouldn’t mind, since it is the only measure we can take at home to go round the sanctions.” (Reporting by Risa Maeda; Editing by Clarence Fernandez)