The European Union is working to coordinate a ban on the provision of insurance services needed to transport Russian oil anywhere in the world with some members of the Group of Seven, according to people familiar with the issue, in a move that could further affect Moscow’s capacity. to finance the war in Ukraine.
The European Commission, the bloc’s executive arm, is in talks with Britain as part of the effort, said one person, who asked not to be identified because the plans are private.
Representatives of EU national governments [were] On Wednesday, it is expected to approve a sixth package of sanctions targeting Russia for its invasion of Ukraine. The measures will include a ban on financing, intermediation services and technical or financial assistance, which would be implemented within six months of the adoption of the package.
Lloyd’s is working with global regulators in the UK to implement Russia’s sanctions
A common push to target Russian oil insurers could dramatically affect Moscow’s ability to finance President Vladimir Putin’s war. This is because 95% of the global liability of tankers is covered by an insurance organization in London called the International Group of P&I Clubs, which must comply with European law.
Without such coverage, Russia and its customers should find alternatives to risks, including oil spills and accidents at sea, which can quickly lead to billions of dollars in claims.
The Financial Times earlier reported that the EU and the United Kingdom had reached an agreement on coordinating the ban.
The safeguards come in addition to the EU’s proposal to ban imports of Russian crude oil within six months of the package’s adoption and refined products within eight months. While deliveries through the giant Druzhba pipeline will be temporarily exempted, Germany and Poland, the biggest buyers from that source, have pledged to cut off Russia’s supply, regardless of any EU action.
If both countries live up to their commitments, the full effect, along with the embargo on the sea, would be a 90% reduction in sales of Russian crude oil to the EU by the end of the year.
The EU initially considered even stronger measures to ban the transportation of oil to third countries, but dropped plans after Greece expressed concern that such a move would require international coordination.
-With the assistance of Michael Nienaber and Alex Morales.
Photo: Oil jackpots, also known as “donkeys”, are operating in an oil field near Neftekamsk, Bashkortostan, Russia, on Thursday, November 19, 2020. Photo credit: Andrey Rudakov / Bloomberg.
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