Just like how tax evasion brought down Al Capone, denying Russian ships protection and indemnity insurance could deliver a crushing economic blow to Vladimir Putin.
theconversation.com
The
European Union and the United States are now targeting maritime protection and indemnity (P&I) insurance clubs to limit Russian shipping capacity and cap the price of its oil, meaning we’re finally beginning to see some smart sanctions for a stupid war.
P&I clubs are maritime insurance groups that specialize in open-ended, large-risk claims. P&I insurance is a requirement for all heavy cargo and container vessels. Under the new sanctions, European P&I clubs can no longer
offer insurance to a vessel carrying Russian oil at a price higher than $60 a barrel.
Since February 2022, governments and the private sector have been imposing piecemeal sanctions against Moscow, including taking aim at the luxury items of oligarchs and Russian President Vladimir Putin’s inner circle.
Yachts and jets were highly symbolic, but sanctions against them weren’t really useful.
A Russian oil tanker sails under Yavuz Sultan Selim bridge in Istanbul in March 2022 after departing from Russia’s Novorossiysk port. (AP Photo/Francisco Seco)
Past success
In 2012, the EU denied P&I insurance
to Iran, effectively halting global Iranian energy exports within hours.
In 2017, I published research that pointed out that Kim Jong-un was acquiring nearly all of his most troublesome goods by sea,
and recommended targeted sanctions against P&I clubs with North Korean vessels in their ranks.
Within days of the U.S. and EU imposing such sanctions, North Korea’s activities ground to halt.
The regime wound up engaging in high-risk, low-reward sea-to-sea transfers to try to make ends meet.
Now that similar sanctions are in effect against Russia, all 3,300 known Russian ships are grinding to a halt. Some are jamming up traffic around Turkey’s
Bosporus Strait and floating idly around Russia’s port city of Vladivostok.
Putin is scrambling to purchase a “shadow fleet” of about 100 vintage end-of-life tankers to try to get Russian oil to market. That won’t be enough to carry the Russian economy, but it could expose inroads to smuggling markets involving ports that overlook P&I insurance.
Keeping the $60 price cap on Russian oil is risky. Tempting Putin to sell oil under $60 will encourage oil smuggling in the shadows. A full P&I ban on all vessels thought to be Russian, however, would be devastating to Moscow.
Just like how
tax evasion brought down Al Capone, it may be this insurance requirement that delivers a crushing economic blow to Putin.
It illustrates why governments and the private sector need to think smarter about sanctions.
Don’t sanction the target. Sanction the environment in which they operate.
english.almayadeen.net
9gag.com
tru from 2020 they started to make covid test on border no idea if it still goes
