Russia’s aerospace and aviation sectors will be blocked from accessing insurance through the UK market as part of Britain’s latest efforts to put pressure on Moscow over the invasion of Ukraine.
The legislation, which is to be put before parliament in the coming days, will prevent UK-based insurance or reinsurance firms from offering contracts linked to Russia, whose businesses and oligarchs are already facing a raft of UK, US and EU sanctions.
The rules could come into force as early as next week and are intended to “severely limit” the industries’ access to global markets, the chancellor, Rishi Sunak, tweeted on Thursday, as Russian forces continued to attack cities across Ukraine.
“Coupled with similar actions by the EU, this move further isolates Russia’s economy from the international financial system,” the Treasury added. Neither the Lloyd’s of London insurance market nor the Treasury were able to immediately confirm the value of soon-to be blocked insurance contracts.
It was also unclear whether the rules would require insurers to cancel existing contracts or just block new transactions.
Russian companies in the aviation or space industry will now be prevented from making use of UK-based insurance or reinsurance services directly or indirectly.
— Rishi Sunak (@RishiSunak) March 3, 2022
This measure will severely limit their access to the global insurance and reinsurance market.
The sanctions have so far targeted two industries in which London, and Lloyd’s in particular, are considered global leaders.
The UK is also a leader in the maritime insurance industry, but British sanctions have largely avoided targeting industries such as shipping.
The EU has also avoided such sanctions, which could affect energy supplies, given the bloc’s reliance on Russian oil and gas.
However, it is understood that the Treasury is considering expanding the sanctions to ban other Russia-linked industries.
Patrick Tiernan, the chief of markets at Lloyd’s, said: “We are in regular communications with the UK government and international regulators and are working closely with the Lloyd’s market to uphold the implementation, at pace, of sanctions applied by governments around the world. We continue to monitor the unfolding situation in Ukraine and our thoughts are first and foremost with those people directly affected.”
