Protection and indemnity insurers have started to withdraw cover from Russia’s Sovcomflot after it was officially sanctioned by the UK government.
Members of the International Group of P&I Clubs also received a letter from a representative of Ukrainian President Volodymyr Zelenskyy, asking them to support the international economic fight against Moscow over its invasion of Ukraine.
Sovcomflot vessels that were insured through International Group members Gard and North P&I Club are were not listed as having an entry with an International Group member on the organisation’s website.
However, North P&I's Sovcomflot entries later reappeared as covered by the club on the International Group's website.
Mike Salthouse, global director (claims) at North P&I, said: “As you will be aware, Sovcomflot is subject to significantly differing trade restrictions [sanctions] in multiple jurisdictions. The position is legally complex and dynamic and we are not in a position to comment further at this time,” Salthouse said.
Gard said it would not comment on individual members.
The UK P&I Club said it is in the process of withdrawing cover “in accordance with UK and EU sanctions.”
However, a number of Sovcomflot ships remain listed on the International Group website as still under cover with Skuld and the West of England.
Skuld earlier told TradeWinds: “Skuld will comply with the prohibitions and designations laid down by sanctions regulations applicable to Skuld and act accordingly. We are not able to comment on individual members and accounts.”
Withdrawal of P&I cover would be a major barrier to Sovcomflot ships trading around the world after classification societies Lloyd’s Register, DNV and ABS announced that they are winding down their business with Russia, leaving ships without safety certification.
Sovcomflot would be able to find alternative P&I cover in Russia. However, it would probably be at lower limits, and without the international recognition that is held by International Group cover.
According to a Bloomberg News report, pressure ramped up on P&I clubs to act after a letter was sent to the International Group from Oleg Ustenko, chief economic advisor to Zelenskyy, on 24 March.
He asked the group to stop providing insurance services to the Russian-controlled fleet, to inflict further damage on its economy.
According to Bloomberg News, Ustenko wrote: “On behalf of President Zelenskyy and the Ukrainian people, in this existential moment for our nation, we’re asking you to terminate all business dealings with the Russian fossil fuel industry, to cut off the flow of cash which is financing the mass murder of innocent people.”
International Group members have provided insurance to hundreds of ships carrying exports from Russian ports since the start of the conflict, Ustenko said.
Paul Jennings, who is chief executive of North P&I, is also chairman of the International Group.
