UK Sanctions New Zealand Insurer for Involvement in Oil Trade

The British government has imposed sanctions on Maritime Mutual, a marine insurer based in New Zealand, following allegations of its involvement in facilitating the trade of sanctioned oil from Iran and Russia. This action is part of a broader effort to disrupt financial networks supporting Russia’s military aggression.

The sanctions, announced on October 9, 2023, specifically target Maritime Mutual Insurance Association, headquartered in Auckland, New Zealand. According to a statement from the UK government, the company has been involved in obtaining benefits from or supporting the Russian government through business operations in a sector deemed strategically significant to Russia’s interests, namely the energy sector.

A special report by Reuters detailed how Maritime Mutual had provided insurance to vessels within what is known as the “shadow fleet.” This fleet comprises hundreds of oil tankers that transport sanctioned cargoes from countries such as Iran, Russia, and Venezuela, often using false documentation and identities to conceal their activities. The investigation revealed that at one point, Maritime Mutual insured nearly one in six of the tankers that had been sanctioned by Western governments.

The sanctions include an asset freeze and disqualification of directors associated with Maritime Mutual. Additionally, Maritime Mutual Association Limited, an affiliate located in Gibraltar, also faced similar sanctions. The UK Treasury has issued a temporary license that permits the winding down of existing insurance policies issued by Maritime Mutual and its subsidiaries prior to the sanctions announcement, effective until April 9, 2024.

In response to the sanctions, a spokesperson for Maritime Mutual stated that the board strongly disagrees with the UK Foreign, Commonwealth & Development Office’s designation of the company on its sanctions list. The spokesperson emphasized that Maritime Mutual and its affiliates do not insure any vessels in the shadow fleet or those carrying oil products originating from Russia. They asserted that any vessel covered by Maritime Mutual’s insurance that later falls into these categories has its insurance automatically cancelled.

The spokesperson added, “The government is incorrect in its assertion that MMIA is involved in obtaining a benefit from or supporting the Government of Russia by carrying on business in a sector of strategic significance to the Government of Russia, namely the Russian energy sector.”

The sanctions against Maritime Mutual form part of a comprehensive package of nearly 300 measures introduced by the UK, marking its most extensive response since Russia’s full-scale invasion of Ukraine in 2022. UK Foreign Minister Yvette Cooper stated, “The UK has today taken decisive action to disrupt the critical financing, military equipment, and revenue streams that sustain Russia’s aggression.”

This latest development underscores the ongoing international effort to hold companies accountable for their roles in facilitating trade with sanctioned nations. As governments continue to tighten restrictions, the financial ramifications for firms involved in such activities could be significant.