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Ship insurer West withdraws cover on two Russian ships over U.S. sanctions

© Reuters.

LONDON (Reuters) – British ship insurer West of England has withdrawn cover for two container ships operated by Russia’s FESCO Transportation Group after the vessels were listed by the U.S. Treasury as part of broader sanctions, West said on Wednesday.

These are the first Russian owned vessels to be hit by U.S. sanctions on their insurance cover.

Washington imposed sanctions on Russian financial institutions last week after Moscow’s invasion of Ukraine.

Two vessels in FESCO’s fleet – the Fesco Magadan and Fesco Moneron – were designated by the U.S. Treasury due to their ownership links with Russian financial institution PSB, which is on the U.S. sanctions list.

“We can confirm that we held the entry (insurance) for these two ships. Due to their recent designation by the U.S. authorities however cover has been terminated in accordance with our rules,” West said in a statement to Reuters.

FESCO, which operates container ships and terminals in Russia, did not immediately respond to a request for comment.

It was unclear whether there was any replacement protection & indemnity (P&I) cover for the two vessels.

Ships typically have P&I insurance, which covers third party liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage.

FESCO said in a statement on its website on Monday that it continued “to provide logistics services on all existing routes in full.”

The world’s biggest container shipping lines on Tuesday temporarily suspended cargo shipments to and from Russia in response to Western sanctions on Moscow in a further blow to trade with the country.

Ship insurer West withdraws cover on two Russian ships over U.S. sanctions

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