Make sanctions consistent again
Liberal democracies are ramping up pressure on Russia and Iran, but there are limits to the sacrifices the maritime industries can be asked to take on
If Western governments are going to tie shipowners’ hands behind their backs, at least make the playbook clear and congruous
POLLSTERS don’t routinely conduct separate surveys of the foreign policy preferences of shipping and marine insurance professionals. But their opinions on such matters will likely tend to reflect the wider outlook in the societies in which they live.
The clear consensus in liberal democracies is that Russia should be punished for its invasion of Ukraine and that the world would sleep easier if Iran were not in possession of nuclear weapons.
Considered purely as an abstract ethical question, sanctions in support of these ends are unobjectionable and command majority support in Europe and North America.
But sanctions are not purely an abstract ethical question. They impose costly obligations on for-profit shipping and marine insurance companies, in contravention of the free-market liberties our societies also esteem.
They have singularly not managed to cripple the Russian economy and there is little to suggest that the impending return to the pre-2016 status quo will have much impact on Iran either.
Critics contend that manifest inefficacy renders them almost pointless. So why should Western shipping and marine insurance be burdened with such detriments, especially when their Asian counterparts are actively encouraged to keep on trading?
To the best of our knowledge, no industry leader has publicly spoken out against sanctions.
Although there is some evidence of tanker operators cheating on the current $60 per barrel price cap on Russian crude, a certain degree of malpractice is always going to be the way of this world.
The key thing is that there has been no return to the all-but-open refusal to heed the embargo on the white supremacist regime in what was then Rhodesia in the 1970s, for instance.
But it needs to be emphasised that the global majority does not live in liberal democracies. China is more than happy to buy discounted crude from Russia, while selling it full price arms and maintaining warm relations with Iran.
An increasing number of countries follow Beijing’s lead. Shipowners domiciled in BRICS member states, and BRICS member states wannabes, can happily ignore the Western playbook.
By contrast, contradictory government diktats are leaving their Western opposite numbers increasingly tied up in knots, as two Lloyd’s List stories this week illustrate.
As we reported yesterday, from next month the regulations governing the Russia price cap will diverge slightly between the EU and the UK, and markedly between those parties and the US.
This has understandably alarmed the Lloyd’s Market Association, which has highlighted the risk of hull, cargo and P&I underwriters being slapped with penalties purely because of these incompatibilities.
