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Summary of comment and guidance for insurance and financial planning professionals about the war in Ukraine

News article

Publication date:

11 March 2022

Last updated:

14 March 2022

Author(s):

Policy and Public Affairs

Insurance and financial services professionals are reminded to be aware of current risks and sanctions as a result of the Russian invasion of Ukraine.

The UK Government have announced sanctions to be made against Russian companies in the aviation or space sectors to prevent them from making use of UK-based insurance or reinsurance services, directly or indirectly[1]. The UK Government will bring in legislation to prohibit UK based insurance and reinsurance providers from undertaking financial transactions connected with a Russian entity or for use in Russia.

 

The Financial Conduct Authority (FCA) has also reminded firms about their obligations regarding sanctions[2]:

We expect firms to have established systems and controls to counter the risk that they might be used to further financial crime and this includes compliance with financial sanctions obligations. Where the FCA identifies failings in financial crime systems and controls we can impose restrictions and/or take enforcement action. Additionally, the Office of Financial Sanctions Implementation (OFSI) has the power to levy civil monetary penalties for breaches of financial sanctions and works with law enforcement for the most egregious cases where criminal prosecution may be considered.

Our expectations of firms’ systems and controls in relation to compliance with financial sanctions are set out in FCG 7 of our Financial Crime Guide including examples of good and poor practice in relation to firms’ governance, risks assessment and approaches to screening in relation to financial sanctions.

 

Firms should check the UK Sanctions List to ensure they are complying with current advice. Firms are also recommended to remain vigilant with cyber security, business continuity and risk management processes in case of potential escalations.

 

 

References:

[1] https://www.gov.uk/government/news/uk-to-bring-in-further-sanctions-targeting-provision-of-insurance

[2] https://www.fca.org.uk/news/statements/new-financial-sanctions-measures-relation-russia 

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.