Sanctions-related insurance disputes to rise as EC adds latest package

As the EC announces its tenth package of sanctions against Russia, law firm Clyde & Co expects rising sanctions-related insurance disputes this year. Christopher Hill, partner at Clyde & Co in London, said there are already a “great many” insurance disputes arising from Russia-related sanctions imposed since war broke out with Ukraine in February last year. “We anticipate the numbers rising further, with sanctions clauses likely being increasingly tested both in the UK and other jurisdictions,” he said. “Certain classes of business (such as those with an aviation touchpoint) have already seen large claims made by insureds, some of which are currently the subject of disputes in the UK courts. We anticipate that this trend will extend to a number of further classes of Russia-related business,” explained Hill. “As the year progresses, we will likely see further restrictions imposed by the UK and the EU in response to the ongoing conflict in Ukraine. Indeed, the EU imminently intends to designate more entities and individuals involved in spreading misinformation and to extend export restrictions on further categories of goods. In addition, looking ahead, we anticipate an increasing focus from UK and EU authorities towards enforcement to further deter non-compliance,” added the lawyer. Hill said that moving from a period of intense new sanctions to a more “business as usual” trading environment comes with its own challenges and will keep sanctions compliance at the forefront of insurers’ minds. The EC welcomed the Council of Europe’s adoption of a tenth package of sanctions against Russia and those that support its aggression against Ukraine on 25 February. “24 February marks one year since Russia's full-scale invasion of Ukraine and nine years since the beginning of Russia's illegal invasion and occupation of Ukrainian territory. This package is turning up the pressure in response to Putin's brutal war, including viciously targeting civilians and critical infrastructure,” said the EC. “In order to further increase the effectiveness of EU sanctions, today's package contains new listings plus trade and financial sanctions, including further export bans worth more than €11bn, depriving the Russian economy of critical tech and industrial goods. It also steps up enforcement and anti-circumvention measures, including a new reporting obligation on Russian Central Bank assets,” it continued. As part of the latest package, the EU has added about 121 individuals and entities to its sanction list, including Russian decision-makers, senior government officials and military leaders complicit in the war against Ukraine, as well as proxy authorities installed by Russia in occupied Ukraine territories. The list also includes key figures involved in the kidnapping of Ukrainian children to Russia, as well as organisations and individuals that the EC says are “polluting the public space” with disinformation through information warfare.

Sanctions-related insurance disputes to rise as EC adds latest package

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