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Lloyd’s warns on sanctions evasion tactics

Lloyd’s has issued a new market bulletin on how to counter North Korean and other sanctions evasion tactics. The bulletin points out the constant evolution of tactics to evade sanctions, including using otherwise legitimate shipping activities to conceal movement of illicit goods. Lloyd’s says the insurance market can be exploited as a means of getting permits for voyages and transfers of goods.  So the insurance market, particularly the reinsurance market, should review due diligence policies and procedures to ensure they mitigate the risks of inadvertent exposure to sanctionable activity.

The guidance includes tips on dealing with brokers and key risk factors, as well as how a risk-based mitigation framework should operate and appropriate enhanced due diligence measures, as well as ongoing monitoring and reporting.

The guidance includes useful examples of what would be red flag risks and give examples of known sanctions evasion tactics.

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Emma Radmore