Russia Says Oil Tankers Will Sail Without Insurance

Law360, London (June 7, 2022, 2:53 PM BST) -- A key ally of President Vladimir Putin has said Russian oil tankers will continue to supply foreign ports even if they cannot get insurance due to Western sanctions, saying the vessels will use the Kremlin's guarantees instead.

Dmitri Medvedev, deputy chair of the Kremlin's security council, said on his personal Telegram channel Monday that Russian oil tankers which cannot get insurance will be covered by state-provided assurances based on trade agreements between Moscow and the importing country.

Telegram is an encrypted digital messaging service, which allows users to set up channels to send content to subscribers. It is widely used in Russia.

The former Russian president, who has been sanctioned by the U.S., said the EU's planned insurance ban was meant to "complicate [oil] shipments to third countries," and that the "European imbeciles" have shown that they consider their own citizens to be enemies along with Russians.

"Europe is not interested at all in how this measure takes a toll on our partners," Medvedev said in Russian. "This problem has been solved — the issue of insurance procurement can be solved by means of a government assurance under the framework of multinational agreements with third countries."

Medvedev, who served as prime minister under Putin until 2020, also said the EU's plan to reduce Russian oil imports by 90% could put EU citizens "up against the wall" and would cause governments in the bloc to buy the country's energy products on the gray market instead, bypassing sanctions.

The EU's sanctions also cut off Russia's largest lender, Sberbank, from interbank messaging service SWIFT, preventing it from communicating with correspondent banks in other countries.

The European Commission has also put together a new task force to make sanction evasion a standardized crime across the EU, toughening up law enforcement's powers to trace, freeze and recover Russian oligarchs' assets.

Western sanctions have caused Russia to grow increasingly isolated from the global insurance market, with major companies pulling out of the country and an international insurance body expelling Russian companies in protest against the invasion of Ukraine. U.K. insurers have also suffered a 'profound' impact as they try to comply with new sanctions coming out of Westminster. 

The war has also caused soaring premiums for cyberattack and political risk insurance as companies are caught up in the Russia-Ukraine war, with major Western tech firms potentially facing cyberattacks from Russian state actors.

--Additional reporting by Joel Poultney, Sarah Jarvis, Daphne Zhang and Irene Madongo. Editing by Joe Millis.

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