LLOYDS OF LONDON: COUNTERING NORTH KOREAN AND OTHER SANCTIONS EVASION TACTICS

On 2nd April, Lloyds issued a Market Bulletin advising the London (re)insurance market on sanctions exposure risk in relation to the North Korea, Syria and Iran, including identifying proliferation financing and sanctions evasion tactics.   It gives guidance on due diligence and monitoring procedures relating to marine cargo and hull classes.  It says that existing due diligence and monitoring procedures should be reviewed and validated, particularly in respect of marine cargo and hull exposures.  Sanctions evasion tactics in the guidance refers to the various methods used to conceal involvement with or ownership of vessels, goods being shipped, or the origin or destination of vessels, to conduct activity that is prohibited under a sanctions programme.  It warns that, while the inclusion of sanctions limitation and exclusion clauses can provide (re)insurers with a degree of legal protection if illicit activity is detected post-bind, (re)insurers are reminded that an adequate sanctions clause may suspend liability but might not extinguish liability.  The Bulletin includes a suggested questionnaire for due diligence checks –

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https://www.lloyds.com/~/media/files/the-market/communications/market-bulletins/2019/04/y5246.pdf

 

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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