Sanctions
Financial sanctions continue to create problems for ship owners, operators, financiers and insurers. The maze of UN, U.S., EU and UK sanctions may impact voyage routes and deliveries with potentially serious ramifications. We do not expect this position to change in 2025 which seems set to be a year of increasing geopolitical instability. Indeed, since taking office on 6 January 2025, President Trump has already threatened Russia with additional sanctions if the war in Ukraine continues.
In the circumstances, Marine Insurers should continue to review their exposure to thematic regimes, even if they are operating in a jurisdiction not subject to a geographic regime. Illicit activity could occur across multiple sectors involved in the maritime industry. Organisations that may be particularly exposed to financial sanctions risk are Marine Insurers, charterers, classification societies, suppliers of cargo, customs and port state controls, flag registries, ship brokers, ship owners, bunker suppliers, shipyards, financial institutions involved in maritime trade finance.
It is essential to carry out appropriate due diligence measures to manage risks. Compliance teams should be well trained and programmes must be well resourced and proportionate to the risk. It is crucial to communicate compliance expectations with counterparties, partners, subsidiaries, and affiliates in line with local regulations.
Marine Insurers should develop, implement and adhere to written, standardised operational compliance policies, procedures, standards of conduct, and safeguards. All compliance programmes should specify that engagement in sanction able conduct, transacting with designated individuals or entities, for example, may result in immediate termination of business or employment. Insurers should make sure that their sanctions compliance programmes are routinely audited by qualified third parties and legal advice is sought where appropriate and necessary.
Our highly experienced team here at DWF has been assisting insurers navigate sanction regimes for many years and is well positioned to continue to do so in the future.
To read the full section, download the Global Risks: Horizon Scanning report.
