In response to the devastating events in Ukraine, the West has imposed sanctions on Russian trade, banks and other entities, and many individuals with links to the Russian regime. Sanctions are penalties imposed by one country on another to stop it from acting aggressively or breaking international law.
The vast majority of insurance policies have a sanctions exclusion. This clause prevents any claim payment, benefit or assistance, and to do so may breach any UK, EU, UN, US or other sanction.
Sanctions have been in place with a number of territories for several years; however, the recent sanctions regarding Russia and Belarus are new, closer to home and could be extended at short notice.
If you conduct any activities in Russia or Belarus, or with any Russian connections in the UK or elsewhere, directly or through your supply chain, we encourage you to discuss this with your usual contact. If you have no such dealings, any sanction exclusion in your policy is unlikely to be of concern.
Compliance with sanctions applies to every person and business, not only financial institutions. Any breach is a criminal offence with potentially severe penalties.
There are several online sanction-checking services. Any business that may have exposure should subscribe to one of those services to help identify and manage their sanctions risk.