Sanctions include a range of financial or trading restrictions, such as freezes on the assets of and travel restrictions on nominated individuals, bans on financing of state-owned enterprises, prohibitions on the supply of technical, financial and other assistance and outright prohibitions on trade.
Economic, trade or financial sanctions are imposed by governments or the United Nations to exert pressure on individuals or political regimes and for the advancement of foreign policy objectives. In the UK, a person or firm who breaches the terms of a sanction is guilty of a criminal offence.
The most important sanctions for Lloyd’s are those imposed by the US government and the EU. EU sanctions are typically imposed through Council Regulations, which have immediate legal effect in member states (including the UK). In the US and the EU, sanctions often implement measures contained in Resolutions of the United Nations Security Council.
Country specific sanctions and trade controls information
Sanctions can be applied unilaterally or collectively and different rules will apply to each sanctions regime. Some of these sanctions affect designated individuals only in the targeted country. There are also sanctions in place against named individuals or entities who are:
- indicted by the International Criminal Tribunal for former Yugoslavia
- related or belong to the Taliban and the Al-Qa’ida network
- suspected terrorists
The HM Treasury publishes a consolidated list of financial sanctions targets listed by the United Nations, the European Union and the UK. This list includes all individuals and entities noted on all current sanctions lists.
There is no specific statutory or regulatory obligation on general insurers to check their customer lists against the HM Treasury sanctions lists; however, in order to avoid committing an offence of non-disclosure, it would be prudent for firms to do so.
There are a number of statutory instruments relating to financial sanctions and terrorist financing. These measures apply to all firms regulated under the FSMA (rather than just to banks, on whom additional obligations are placed) and create a number of offences including that of failing to disclose knowledge or suspicion that any person on the relevant HM Treasury sanctions list is, or has been, a customer of the firm.
Lloyd's produces detailed due diligence process guidance to assist managing agents in understanding the impact of UK and US sanctions legislation.
Market Bulletin:
6 February 2012: Y4560- Sanctions Compliance
20 January 2011: Y4463- Iran. EU Sanctions
8 July 2010: Y4409- Iran. Market Direction
18 December 2009: Y4366- Sanctions
14 January 2008: Y4117- International Sanctions Guidance
