Page 211 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 199

2. The Problem of Getting Marine Insurance Coverage to/through the Perceived
Sanctioned Countries

There are periodic declarations by the U.N, E.U, U.S.A. and U.K. governments prohibiting
transactions of certain commodities with certain entities of a country. Apart from the usual U.S., E.U.,
U.K., and U.N. sanctions, there are country-to-country-specific sanctions, albeit dynamic in nature.
Some examples would be U.A.E. sanctions against Qatar or Russian sanctions against Turkey. To the
best of our understanding, no country per se can be sanctioned as a whole. In a strict sense (from the
U.S. perspective), about four countries may be remotely thought to be totally sanctioned. These are as
per the Office of Foreign Asset Control (OFAC) of the U.S. government and apply to Iran, Syria, Cuba
and North Korea. It is again to be noted here that this prohibition of doing business or writing cargo
insurance applies to American nationals and corporate entities registered in the U.S.A. In addition,
commodity or entity-related sanctions exist for Chinese military companies’ entities in Venezuela, Syria,
Somalia, Yemen, South Sudan, and others. Thus, the sanctions generally apply to individuals/entities
for certain commodities. The sanctions also relate to arms and weapons of mass destruction (W.M.D.)
apart from other contra-banned items. In other words, broadly, a country may be subject to sanctions in
either/or all domains called economic sanctions, sanctions on individuals on political or economic grounds,
military sanctions, sports sanctions, or environment-linked sanctions, which all are well defined. In
such circumstances, as long as the goods in question are not sanctioned or sensitive, and the Exporter/
Importer is not a sanctioned entity, there should not be a problem getting insurance protection. All the
Insurers should realize that there is no concept of a blanket sanction.

An example would be the E.U. sanction on Venezuela extended up to 14.11.2020. The document
states, “In light of the ongoing political, economic, social and humanitarian crisis in Venezuela with
persistent action undermining democracy, the rule of law and respect for human rights, the Council
extended the restrictive measures against Venezuela for one year, until 14 November 2020. The measures
include an embargo on arms and equipment for internal repression, a travel ban, and an asset freeze on
25 listed individuals. Therefore, the Insurers should not impose any restriction on granting coverage for
any other general export meant for somebody other than these 25 individuals and perhaps on 19 more
individuals as per further E.U. sanction dated 22.2.2021 or so. Therefore, more due diligence is needed
towards sanctionable activities and “fronting” companies who try to legitimize a sanctioned entity by
transacting in another country under another name but eventually transporting it to the sanctioned
entity. A more vigilant approach and market intelligence are required for the Asian Marine Underwriting
fraternity. The sanction issue is ever-changing, and the underwriters need to monitor the situation closely
and take a reasonable, rational decision within the parameters of the law. As an example, and for the
record, the link of the U.N. Security Council consolidated 176-page list of 2 sanctions, namely individuals
and Entities/ other groups, is given (un.org/security council/content/un-sc-consolidated-list).

3. The Problem of Getting Marine Cargo Insurance Coverage Beyond the Port of
Discharge in Africa

Many E.P.C. contractors from Asia are winning several project contracts in various countries of the
African continent. Among others, these countries are Rwanda, the Republic of Congo, the Democratic