Russia Price Cap: Enforcement action and new advisory

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) yesterday imposed sanctions on two non-U.S. entities and vessels which they assert used U.S. service providers while carrying Russian crude oil above the agreed price cap.
 

This is the first time such enforcement action against vessels and their owners has been taken by one of the Price Cap Coalition members  (the G7 plus EU and Australia)  and coincided with a statement which reinforces that:
 

“..the Coalition is committed to enforcing compliance with the price cap to deny Russia the revenue it needs to prosecute its brutal war in Ukraine”.
 

Further, the Price Cap Coalition also published a new Coalition Advisory for the Maritime Oil Industry and Related Sectors which contains seven best practice recommendations for industry stakeholders to adopt. 

Members and clients are recommended to read the advisory in full.
 

Members and clients are reminded that in order to ensure compliance with both trade and party related sanctions against Russia:

·Voyage details must be provided to the Club for all Russian port calls and transits of Russian waters in the form of a SPIRE report together with a copy of the bill(s) of lading as explained in our  Circular.  These details must always be provided before the Club is able to assist and in any event within one month of a call to a Russian port or transit of Russian waters.

·For the transport of Russian origin crude oil or petroleum products that fall within the price cap:

Voyage details must be provided, as above, irrespective of whether or not the vessel calls at a Russian port or transits Russian waters; and

An attestation, in the format set out in Annex II  of our Circular: The Price Cap on Russian Oil  must also be provided to the Club.

·As set out in paragraph (2) of the attestation provided to the Club, the assured agrees to also provide to the Club “information and documentation related to compliance with the price cap policy, including any relevant attestation and/or proof of reporting provided by a Tier 1 or Tier 2 actor, as quickly as practicable upon request and in no case later than five business days of the request”.

For the Club to provide cover to vessels engaged in the lawful carriage of Russian Crude Oil or Petroleum Products, an insured shipowner or charterer must comply fully with the requirements of all the Price Cap scheme, conduct appropriate due diligence and adhere fully to the attestation processes.

Source: NorthStandard