Why does a quote ask who the consignee is?

Because a sanctions limitation clause is in almost every cargo wording, and an insurer cannot pay a claim where paying would breach a sanctions regime. Screening the parties before a certificate is issued is how that is avoided; the alternative is discovering it after a loss.

What does a sanctions limitation clause say?

In substance: the insurer provides no cover and pays no claim to the extent that doing so would expose it to a sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions of the relevant jurisdictions. It operates automatically and does not need the insurer to have known in advance.

Can a shipment become sanctioned after cover attaches?

Yes. Designations change, sometimes quickly, and a route or a vessel that was clear at inception may not be later. The clause operates on the position at the time of the claim, which is why routes and vessels are rescreened on long transits.

Whose sanctions apply?

More than one regime, usually. United Nations measures, the jurisdiction of the insurer and of any reinsurer, the currency of the payment, and the jurisdictions of the banks in the chain. A payment can be lawful for the insurer and still be stopped by a correspondent bank.

Why a cargo quote asks who is on both ends

Cargo moves between jurisdictions by definition, which is why a sanctions limitation clause is on almost every wording. It removes cover to the extent that paying would breach a sanctions regime — automatically, and regardless of what anybody intended.

Sanctions limitation clauseScreened before issueRegimes change

What the clause does

In substance, a sanctions limitation and exclusion clause states that the insurer provides no cover and pays no claim to the extent that doing so would expose it to a sanction, prohibition or restriction under United Nations resolutions, or under the trade or economic sanctions, laws or regulations of the jurisdictions that apply to it.

It operates by force of the clause rather than by decision. There is no discretion to exercise, and the insurer being unaware of the designation does not help either party. The only useful moment is before the cover is placed.

What gets screened

The parties

Insured, consignor, consignee, notify party and, where relevant, the beneficial owner. A sanctioned party anywhere in the chain is the usual reason a placement stops.

The route

Origin, destination, transhipment points and, on a sea transit, the waters the voyage passes through. Some restrictions attach to a port rather than to a country.

The goods

Dual-use items, controlled technology and goods subject to sectoral restrictions. A commodity can be unrestricted in general and restricted for one destination.

The conveyance

On a sea transit, the vessel and its ownership. Vessel-specific designations exist and change frequently.

More than one regime applies

A single shipment can sit under United Nations measures, the sanctions law of the insurer's jurisdiction, that of any reinsurer, that of the currency of settlement, and that of every bank in the payment chain. A claim can be perfectly payable under the policy and still be stopped by a correspondent bank, which is why the answer to "are we clear?" is never a single yes.

We publish no list of designated parties, vessels or territories. Designations change with events; a stale copy on a website is worse than none, and the authoritative lists are maintained by the issuing authorities themselves.

Common questions

Why does a quote ask who the consignee is?: Because a sanctions limitation clause is in almost every cargo wording, and an insurer cannot pay a claim where paying would breach a sanctions regime. Screening the parties before a certificate is issued is how that is avoided; the alternative is discovering it after a loss.
What does a sanctions limitation clause say?: In substance: the insurer provides no cover and pays no claim to the extent that doing so would expose it to a sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions of the relevant jurisdictions. It operates automatically and does not need the insurer to have known in advance.
Can a shipment become sanctioned after cover attaches?: Yes. Designations change, sometimes quickly, and a route or a vessel that was clear at inception may not be later. The clause operates on the position at the time of the claim, which is why routes and vessels are rescreened on long transits.
Whose sanctions apply?: More than one regime, usually. United Nations measures, the jurisdiction of the insurer and of any reinsurer, the currency of the payment, and the jurisdictions of the banks in the chain. A payment can be lawful for the insurer and still be stopped by a correspondent bank.

War and political risk cover The law behind the cover

Sources

Sanctions regimes are maintained by the issuing authorities and change frequently. Nothing on this page is a screening result or a compliance opinion.

This page summarises the instruments above. It is not the wording, and it is not legal advice. Where a summary conflicts with a convention text, a policy wording or a certificate, that document governs.

InsuranceScanner is an insurance intermediary, not an insurer — see the Terms for our role. Nothing here is a personal recommendation that a particular cover, sum insured or deductible is suitable for you. Where anything on this page conflicts with the certificate, policy schedule or wording issued by an insurer, that document governs.