Gard chief executive Rolf Thore Roppestad says international insurance sanctions targeting Russia need to be harmonised if they are to be effective.
The UK, US and European Union have all issued their own sanctions legislation banning insurers from covering ships carrying Russian oil cargoes purchased above a designated price cap.
Western governments view the inclusion of protection and indemnity insurance in the sanctions as an effective way to stop ships from trading Russian oil.
The International Group of P&I Clubs is talking to governments about how the regulation can be applied practically.
“It is a challenging and complex situation we are in, and the International Group is doing a very good job for the industry, having a very close dialogue with the authorities across the Western countries,” Roppestad said.
“I think what is very important is that we get harmonised sanctions regimes across the UK, the US and Europe. If we don’t have a harmonised sanctions regime, it will not get the intended result. I think that is the most important thing.”
The EU, UK and US are applying the price cap scheme to allow some Russian oil to trade to third countries at an affordable price that will limit revenue to Russia.
Governments have yet to outline clearly how P&I clubs will be expected to know the value of cargo traded on the ships they are insuring. Discussions with the International Group continue.
Good outcome
Roppestad thinks the clubs will find it difficult to police the trade in Russian oil.
“We know that there are processes going on across the UK, US and Europe and we just hope for a good outcome from those discussions,” he said.
“I think some things we can do, others will be more challenging.
“For example, some of the things around the price cap will be impossible for P&I clubs to administrate. We don’t have any insight into the price of the cargo carried and I think it is difficult to track, so I see a lot of challenges with that, so I think the dialogue with the authorities over what we can practically do is very important.”
Roppestad was speaking to TradeWinds on the announcement of Gard’s half-year results. It plans a 5% to 7% general increase for members at February’s renewal. However, renewing members will get a 5% general discount.
