Market Guidance on Russia-Ukraine sanctions

25 February 2022


In light of the recent situation in Ukraine, several sanction regimes to which LIC is subject are being updated to target Russia and Russian interests. To date, additional sanctions have been announced by the US, the UK, and the European Union.

Sanctioned Territories

The latest sanctions include economic restrictions on the separatist territories of Donetsk and Luhansk. In order to comply with applicable sanction regimes, Managing Agents (‘MAs’) should ensure no risk is written which exposes LIC to the separatist regions of Donetsk and Luhansk. Screening systems should update relevant geographic indicators such as city or port names in their data feeds in order to identify those regions and reject any associated risk.

As per normal procedures, any MA able to identify such exposure in their existing portfolio should notify LIC immediately.

Sanctioned Names

The US, UK, and EU have added individual and entity names to their respective sanctions lists. Those names should be added to each MA’s sanctions lists for automated screening effective immediately.

Additionally, for all individual and/or entity names added by any of the applicable sanction regimes, each MA should review their portfolio and identify any exposure to the newly sanctioned names. Any exposure found should be escalated as soon as possible to LIC via LIC will work with the MAs to de-risk any policy with exposure to those names where required.

UK Sanctions

LIC is subject to the UK sanctions regime through its direct relationship to Lloyd’s and because of LIC’s reinsurance of business to Lloyd’s syndicates.  Also, UK sanctions rules apply in full to the LIC UK branch’s activities forward.

The UK government has announced sanctions on five Russian banks and three high net worth individuals. The sanctions include asset freezing restrictions and a travel ban. The latest added names can be found on the OFSI page.

US Sanctions

The US have issued a new Executive Order (EO) which prohibits US persons from engaging in new investment, trade, and financing in Donetsk and Luhansk.

The US have also added several Russian individuals, institutions, and vessels to the list of SDNs.

The US have also designated NordStream 2 and its Managing Director as Specially Designated Nationals (SDNs). US Persons can no longer transact / provide (re)insurance services, and non-US Persons risk the threat of secondary sanctions by providing material support to NS2. OFAC have issued a General License for firms to wind down all transactions with NS2 by 2 March 2022. any entity in which Nord Stream 2 AG owns, directly or indirectly, a 50 percent or greater interest are also targeted and should be identified.

As per DXC’s communication, sanctions procedures are being updated to reflect the new restrictions. This means that any transaction that includes exposure to the two separatist regions of Donetsk and Luhansk will be rejected by DXC, and should therefore not be submitted. The same applies to any policy with exposure to the newly sanctioned names.

As per normal procedures, any MA able to identify such exposure it their existing portfolio should notify LIC immediately.  

EU Sanctions

The first EU sanctions package targets individuals and financial institutions involved in the decision-making process or in support of Russia’s actions. This includes all the 351 members of the Russian State Duma, as well as 27 high profile individuals and entities (see Council Implementing Regulation (EU) 2022/260 and 2022/261).

The EU package also includes sanctions on economic relations between the EU and the two separatist regions, including (re)insurance of goods originating in the specified territories (see Council Regulation (EU) 2022/263).

Finally, it imposes financial restrictions to target the ability of the Russian state and government to access the EU’s capital and financial markets and services.

Additional sanctions are incoming which will target the Russian banking market, state-owned companies, the energy sector, aircraft, and limit Russian access to specific technology.

In light of the most recent developments, further rulings are expected and communications will follow quickly as the situation evolves.


Mathias DUB

Compliance Officer

Lloyd’s Europe

Place du Champ de Mars 5, 1050 Bruxelles