Ukraine and Russia Conflict
In light of the events unfolding in Ukraine, we have created this dedicated page to address the impact this conflict is likely to have on our Membership and the shipping industry more widely. We hope that the content on this page will help provide guidance to our Members trying to navigate this rapidly evolving conflict. This page will be dedicated to IG and Club updates on the implementation of US, EU and UK sanctions, as well as practical guidance relating to crewing and any claims or legal disputes affected by or arising from the conflict.
Sanctions and your cover
In view of the fast-changing political crisis in Ukraine and the response taken by major states such as the US, EU and UK (among others), we strongly advise Members to carefully check sanctions lists and ensure there are no sanctioned parties or entities involved in their operations.
Members are reminded that Club cover is subject to the Rules of the Association. Cover may be cessed automatically (Rule 46.3H) or terminated by notice (Rule 45.4) where the Member or the provision of insurance to the Member may expose the Association or its Managers to the risk of being or becoming subject to any sanction, prohibition or adverse action by any State being a Major Power or by the United Nations or the European Union. Furthermore, Rule 32 provides a standard exclusion for the right of recovery for liabilities, cost or expenses due to a shortfall which cannot be recovered by the Association from any reinsurer or party to the pooling agreement by reason of sanctions laws and regulations. Similar provisions exist in our plain language policy wordings.
We urge Members to carefully assess the risks involved where their trade has any nexus to Russia, Belarus and/or Ukraine and contact the Club on queries related to the impact of cover.
The US, EU, UK among others have introduced a series of sanctions against Russia since their invasion into Ukraine.
The timeline below is intended to help keep track of the sanctions developments, and Members are advised to familiarise themselves on existing and new sanctions.
The information on our webpage is for general guidance only, and is not a replacement for Member’s own due diligence. We strongly recommend that Member’s carry out their own review of the sanctions that may be applicable, and check the parties involved and the activities they intend to carry out.
US sanctions against Russian maritime sector
On 8 May, the US imposes further sanctions targeting Russian maritime companies and a number of associated vessels, which are alleged to have assisted with the resupply of Russian troops and the continued occupation of Crimea. The list of sanctioned shipping companies includes:
- SC South LLC, which is a subsidiary of Oboronlogistika;
- Northern Shipping Co, including 27 of their vessels;
- Transmorflot, including 16 of their vessels;
- M Leasing LLC;
- Marine Trans Shipping LLC; and
- Nord Project LLC Transport Co.
Further details can be found in Executive Order 14024, which is available on the US State Department website (https://www.state.gov/state-department-actions-to-promote-accountability-and-impose-costs-on-the-russian-government-for-putins-aggression-against-ukraine/)
UK imposes new trade sanctions
On 9 May, the UK announced a new package of trade sanctions. The sanctions focus on two key areas:
- New import tariffs on platinum and palladium; and
- Planned export bans intended to hit more than £250 million worth of goods in sectors of the Russian economy most dependent on UK goods, including certain chemicals, plastics, rubber and machinery.
A copy of the press release can be found here – UK punishes Putin with new round of sanctions on £1.7 billion of goods – GOV.UK (www.gov.uk)
On 4 May 2022 the EU adopted a sixth package of sanctions against Russia. Whilst many of the measures are unlikely to impact the shipping industry, we want to draw Members’ attention to the following provisions:
- The removal of Sberbank, Russia’s largest bank, and two other major banks from the SWIFT system; and
- An import ban on all Russian oil products.
The EU has been grappling with the issue of dependency on Russian energy, but particularly Russian oil. This sixth package of sanctions provides that Russian crude oil will be phased out within 6 months and the import of refined products by the end of 2022. This will bring the EU into line with the US, who banned the import of Russian oil in March.
European Sanctions: “If Russia invades Ukraine…” sanctions webinar recording