The logo of Russia’s state-owned shipping company Sovcomflot is seen on the standby multifunctional ice-breaking ship ‘Yevgeny Primakov’ moored in central St. Petersburg, Russia, February 3, 2018. REUTERS/Anton Vaganov/File Photo
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LONDON, April 29 (Reuters) – Western marine insurers are ending coverage for Russia’s leading shipping company Sovcomflot as multiple sanctions begin to take effect, the companies involved say, reflecting mounting challenges for the state-owned company and Moscow’s efforts to export oil and gas even strengthened.
The Russian shipping sector is witnessing the unwinding of several services, including ship certification by leading foreign providers – crucial for access to ports and obtaining insurance -, shipping companies are withdrawing and marine engine manufacturers are suspending training for their equipment after the Moscow invasion of Ukraine. Continue reading
Ships usually have Protection & Indemnity (P&I) insurance,
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third party liability claims including environmental damage and personal injury. Separate hull and machinery policies cover vessels against physical damage.
P&I insurer West said in a statement: “In accordance with applicable sanctions regime, West has served Sovcomflot with 30 days’ notice and coverage will expire on 4 May 2022.”
Sovcomflot (SCF) (FLOT.MM) said when asked that all its ships are “insured in accordance with industry standards and requirements of international conventions”.
The UK Club, another P&I provider, said that in order to comply with UK and EU sanctions it “issued a 30-day notice period to Sovcomflot in early April in relation to their registered vessels”.
SCF, which has one of the world’s most modern oil tanker and gas tanker fleets, has been hit by separate sanctions from the UK and Canada, while the US has prevented it from raising capital in its financial markets.
The European Union listed SCF among Russian state-owned companies with which it was “banned from transacting, directly or indirectly,” after a May 15 settlement deadline.
It was unclear which insurance cover SCF had secured. Dozens of its vessels had previously been insured by players including West, UK Club and North, shipping records showed.
Ship insurance sources said while Russian insurance coverage, for example, would be acceptable, payment problems due to financial sanctions imposed on Moscow could leave SCF tankers in trouble at sea.
Russian ships are also struggling to source marine fuel as sellers have stopped delivering Russian-flagged vessels to key European hubs such as Spain and Malta. Continue reading
SCF ships previously covered by the Norwegian Gard were no longer listed on the company’s website.
Gard said it complied with all relevant sanctions and did not comment on individual customers, instead communicating “directly with those affected by the situation”.
Mike Salthouse, senior club manager at another leading P&I insurer North, said there had been “a contractual notice period on the route which has now expired so there are currently no Sovcomflot vessels on file”.
“The majority, or indeed all clubs involved, would most likely not have felt able to continue the business beyond May 15, when the settlement deadlines end and the EU and UK bans on offering Sovcomflot insurance come into effect,” he told Reuters.
“Termination of a listing like Sovcomflot is made more complicated by the different legal approaches of different jurisdictions. Clubs and other insurers have had to spend time resolving any disagreements in a way that does not disadvantage existing third-party plaintiffs. “
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Reporting by Jonathan Saul, editing by Veronica Brown and David Evans
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