Sanctions against Russia
The situation in Ukraine and the corresponding sanctions regimes imposed against Russia continue to develop rapidly. Numerous Russian individuals and entities have over the past few weeks been added to EU, UK and US sanctions lists. Unique to the sanctions landscape concerning Russia is the wide number of states issuing their own, and differing, sanctions regimes against Russia and Russian interests meaning that due diligence requires other relevant sanctions regimes and lists to be consulted depending on the trade. This adds a whole new layer of complexity to consider in international shipping.
Further, a wide transaction ban has been imposed by the EU against certain state-owned entities as well as an import ban on iron and steel products, to mention but a few of the recent measures. There seem to be continued focus on sanctioning the energy, military, financial and luxury goods sectors, in particular, but also the trade in minerals. More detail can be found in the Club’s sanctions by country guides available on the sanctions section of the Club’s website.
As always, it is for Members to ascertain the legality of their trade but the Club wish to highlight that it is important that Members also ensure that their trade is not exposing their insurers and/or reinsurers to sanctions. Even if a trade is lawful for the Member to engage in, if the trade is unlawful for the Club and/or its reinsurers to insure and/or to pay claims for there may be shortfalls of the applicable cover falling back on Members. Cover may further even cease or have to be terminated, depending on the particular circumstances.
The possibilities for EU-based entities, such as the Club, to transfer money or issue securities in Russia is severely affected by the sanctions regimes, especially following the EU sanctions regime restricting access to SWIFT and the now vast number of designated entities and persons, among them the Central Bank of Russia. Members are thus advised to consider trade to Russia to be high risk and be aware of the practical implications these transactional difficulties have on any cover or assistance they can expect from their insurers.
While some of the exact details are yet to be published, Members further need to be aware of the existence of Russian countersanctions and a newly adopted law, federal law No. 56-FZ dated 14 March 2022, allowing Russian authorities to impose restrictions on the entry of foreign vessels into Russian ports.
Members are advised to exercise particular care in performing due diligence on any trade to Russia they may be contemplating. Reference is made to:
The Swedish Club publishes member alerts as a service to members. While the information is believed correct, the Club or the Correspondent cannot assume responsibility for completeness or accuracy.