Council Regulation (EU) No 833/2014
The Council regulation of July 31, 2014 that carries the EU's sectoral sanctions against Russia, including the bans on insuring and reinsuring certain goods, shipments and Russian counterparties.
Council Regulation (EU) No 833/2014 is the Council text that carries the EU's sectoral sanctions against Russia: it prohibits transactions, including insuring and reinsuring certain goods, shipments and Russian counterparties. The Council adopted it on July 31, 2014, two weeks after flight MH17 was shot down over the Donbas, together with Decision 2014/512/CFSP (Common Foreign and Security Policy). The original text targeted Russian state banks' access to EU capital markets, arms, dual-use goods and some oil equipment. Since February 2022 every package has lengthened it, and it now runs to dozens of articles and annexes. It freezes no assets, which is what sets it apart from Regulation 269/2014. For an underwriter, three provisions weigh more than the rest. Article 3c, inserted by Regulation 2022/328 of February 25, 2022, bans insuring and reinsuring the aircraft and parts listed in Annex XI for Russia or for use in Russia. Existing leases had to be unwound by March 28, 2022, and more than four hundred aircraft leased to Russian airlines never came back. Article 3n bans insurance and reinsurance of the maritime transport of Russian oil to third countries above the price cap, applied to crude since December 5, 2022. Article 11 forbids satisfying a claim connected with a contract whose performance has been affected by the measures. And Article 1 counts insurance as financing and financial assistance, so a policy sometimes falls under a ban that never names it. The Court of Justice upheld the scheme in Rosneft, judgment of March 28, 2017 (C-72/15), and accepted that Member States may punish breaches with criminal penalties. The text has to be read by date: cover that was lawful at inception can become prohibited with the next package, and the sanctions clause in the policy only draws the consequence of what the regulation already imposes.
Textbook case: in March 2023, a European cargo insurer covers 700,000 barrels of Russian crude loaded at Primorsk for India. The cap then in force is 60 dollars a barrel, and the charterer's attestation shows 58 dollars: 700,000 x 58 = 40.6 million dollars, under the cap of 700,000 x 60 = 42 million. The cover is lawful under Article 3n. Six months later, an investigation shows that inflated freight charges hid a real price of 67 dollars, or 46.9 million, 4.9 million above the cap. An insurer that did not know and had no reasonable cause to suspect the fraud can rely on Article 10 of the regulation, which rules out its liability; if it had received red flags and filed them away, the argument falls.
Regulation 833/2014, EU Regulation 833, EU sectoral sanctions on Russia, Russia sectoral sanctions regulation, Decision 2014/512/CFSP, Reg. 833
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