Insurers have been used to dealing with sanctions for a long time. The sanctions against Iran 12 years ago led to a number of adaptions and the development of sanction clauses. It is, however, still a challenge for marine insurers to be aware of any new sanctions, to understand their impact and to comply with them, highlights Mr. Lars Lange, IUMI Secretary General.
The Russian aggression against Ukraine led many countries and regions to impose new sanctions against Russia, starting in 2014 with the invasion of Crimea, and expanding after the attack which started on 24 February this year. Particularly, the US and the UK brought a number of additional sanctions into force. And the European Union enhanced its existing sanctions with seven additional packages alone since February 2022.
Marine insurers understand the aim of sanctions, and exercise robust due diligence to comply with them.
In doing so, IUMI would make the following observations:
- Sanctions have to be clear, transparent, easy to understand and feasible. This helps insurers to comply. Too many new and different packages in too short a time frame jeopardise the compliance.
- IUMI offers public stakeholders ongoing dialogue to help understand marine insurers’ needs and challenges. This has been well received and IUMI representatives have been able to provide input enhancing the understanding on how insurers deal with sanctions.
- An (oil) price cap ruling the applicability of sanctions, as discussed by the G7, would need a transparent and robust set-up to work in practice: Which price is relevant? In which currency? At which point of time of the journey? Who is responsible for the correctness? Otherwise insurers would run an uncontrollable risk of unintentionally breaching sanctions.
- If exceptions from sanctions are granted – as in place for the grain transports out of Ukrainian ports – they have to be very clear, unambiguous and harmonised to enable insurers to work with them efficiently.
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