Human rights sanctions regimes (Magnitsky)
Regimes allowing individual sanctions, anywhere in the world, against perpetrators of serious human rights abuses or corruption, without going through a country-specific regime.
Classic sanctions target a country: Iran, Russia, North Korea, and designate persons within that framework. So-called Magnitsky regimes, named after a Russian lawyer who died in detention in 2009 after exposing a tax fraud, target conduct rather than countries. After a 2012 law limited to Russia, the United States adopted in 2016 the Global Magnitsky Act, which allows sanctioning anywhere in the world perpetrators of serious human rights abuses and significant corruption. The European Union created in December 2020 a global human rights sanctions regime, which does not cover corruption, and the United Kingdom adopted a comparable regime the same year. The measures are the same as in other regimes: asset freezes, bans on making funds available, travel bans. Their distinctive feature is reaching persons, leaders, officials, business people, from countries not subject to any general sanctions, and thus catching out compliance systems calibrated on country lists. For insurance, this reinforces the importance of individually screening insureds, beneficiaries and counterparties, and creates a risk for covers of exposed persons, an insured who may be designated during the policy term.
Textbook case: a high-value property insurer covers the art collection of a businessman from a country with no general sanctions. Designated under the EU global regime for involvement in torture, the insured has his assets frozen; the insurer can no longer collect premium or pay a claim without authorization.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.