A leading insurance lawyer has warned the US sanctions imposed on Turkey will further complicate the ability for brokers and underwriters to support their clients.
As the United States announced it will impose sanctions on Turkish ministries and senior government officials as the Turkish invasion of areas in northern Syria continues, law firm Elborne Mitchell warned it was yet another example of how heightened geopolitical tensions are creating an extremely challenging environment for insurers and brokers.
“Insurers and brokers operating in the region will have to scramble to unpick exactly what has been imposed, on whom, and whether they trade with them, so that they do not inadvertently make unauthorised payments,” commented Andy Stevenson, partner at Elborne Mitchell. “For non-US corporations, understanding how they are affected by secondary sanctions is complex, with little practical guidance available from US authorities, and yet the financial consequences of not complying are severe – including heavy fines.”
“Navigating the web of US sanctions in this region is becoming increasingly complex for insurers and brokers and the weekend’s reported attack on an Iranian oil tanker in the Red Sea is the latest example. US insurers are prohibited from dealing with Iran, but the situation for EU insurers is more ambiguous. If the ship was insured on the open market, it will raise many questions about the nature of the attack and whether sanctions exclusion clauses apply. Geopolitical volatility is showing no signs of abating, and we expect this to have an upward effect on pricing in the region.”