A Legal Analysis of Insurance Sanctions Against Iranian Oil Tankers within the Framework of the General Agreement on Trade in Services (GATS)

Abstract

This article examines the legal status of insurance sanctions imposed against Iranian oil tankers within the framework of the General Agreement on Trade in Services (GATS). It argues that marine insurance, reinsurance, and protection and indemnity coverage are not merely auxiliary commercial services but essential legal and financial mechanisms enabling the operation of international tanker trade. By restricting access to these services, sanctions can effectively limit maritime transport, port access, chartering, financing, and the commercial circulation of oil cargoes. The article analyzes whether such sanctions fall within the scope of GATS as measures affecting trade in services and whether they may conflict with core obligations such as most-favoured-nation treatment, market access, national treatment, transparency, and domestic regulation. It further examines the extent to which sanctioning states may rely on security exceptions to justify restrictions imposed on insurance services connected with Iranian oil tankers. The study finds that insurance sanctions may be legally defensible only where they are clearly connected to genuine essential security interests, applied in good faith, and administered in a transparent and proportionate manner. However, broad, unclear, discriminatory, or excessively extraterritorial sanctions risk undermining the multilateral discipline of trade in services. The article concludes that the legality of such measures under GATS requires a case-by-case assessment of their design, scope, effects, and justification. It also highlights the broader significance of service-based sanctions in contemporary international economic law, especially where states use financial, insurance, and logistical services as instruments of geopolitical pressure.