The Russian invasion of the Ukraine has led to an unprecedented level of sanctions against Russia not only by the EU and US but by countries further afield. There has been a remarkable escalation and hardening of sanctions with new sanctions being introduced virtually daily. The EU recently announced a sixth round of sanctions; the US has steadily ramped up its sanctions if in a more staccato fashion.
There will be insurers outside the EU and US, who may have few if any sanctions restrictions on the marine business they can write. There may be few if any restrictions on what business their insureds can transact into or out of Russia or with Russian entities. A number of jurisdictions have not introduced any sanctions against Russia following the invasion.
Whilst such insurers may not be directly subject to any relevant sanctions, their outwards reinsurances may be with EU or US carriers, who are restricted by sanctions. Those carriers may have a reduced appetite generally to be involved in any Russian business at all (e.g. the use of excluded country language). It is important in any event to avoid a situation where, for example, insurers write an inwards risk or pay an inwards claim but are unable to reinsure with or collect from their reinsurers.
In this context, key provisions to be aware of include (a) the asset freeze prohibition and prohibition on making funds or economic resources, which includes insurance, available directly or indirectly to or for the benefit of listed entities (see Article 2, EU Regulation 269/2014 – under which various oligarchs such as Roman Abramovich are listed, the listing extending to entities they control – and EU Guidance dated 3 May 2022) (b) EU trade prohibitions on the provision of financial assistance (which expressly includes reinsurance) in respect of many categories of goods (cf. EU Regulation 833/2014) and (c) US prohibitions on dealing with what is an ever expanding number of blacklisted entities (SDNs).
In summary, whether as an insurer you are directly subject to sanctions restrictions imposed by your home jurisdiction or not, you ignore the sanctions landscape at your peril.