The US Treasury has sanctioned two companies it has accused of violating an international price cap on Russian crude volumes
In December 2022, the US, as part of a Price Cap Coalition consisting of the G7, the European Union and Australia, imposed a US$60 per barrel cap on seaborne exports of Russian crude in response to Russia’s invasion of Ukraine.
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has now imposed its first sanctions under the price cap on two companies, relating to a single vessel at each company, alleging the two vessels used service providers approved by the Price Cap Coalition to carry Russian crude oil above the Coalition-agreed price.
The group alleges SCF Primorye carried Novy Port crude oil priced above US$75 per barrel from a port in the Russian Federation after the crude oil price cap took effect. United Arab Emirates-based Lumber Marine SA is the registered owner of SCF Primory.
Simliarly, the US treasury said YasaGolden Bosphorus carried Eastern Siberia Pacific crude oil priced above US$80 per barrel after the crude oil price cap took effect. Turkey-based Ice Pearl Navigation Corp is the registered owner of Yasa Golden Bosphorus.
"This action underscores the Treasury Department’s commitment with its international partners to responsibly reducing Russian government oil profits and constraining the Russian war machine. Treasury and the coalition will remain vigilant in monitoring the compliance of shipping companies and vessels participating in the Russian oil trade while using the services of Price Cap Coalition service providers," the treasury said.
With the sanctions levied, OFAC has put a block on all property and finances of the sanctioned entities that are under US control.
Yasa Holdings has publicly denied the sanctions against its company and vessel in multiple media reports, saying the ship has never carried Russian oil above the price cap and citing attestations from charterers that the oil it transported was below the cap, as well as approval from the vessel’s P&I and hull and machinery insurers.
Alongside levying the first officially sanctioned trades, the Price Cap Coalition members announced an ’advisory,’ putting shipping on alert that compliance efforts around the agreed price cap would tighten.
"The Coalition is issuing a Maritime Safety Advisory to promote responsible practices in the maritime oil industry and enhance compliance with the price caps on crude oil and petroleum products. By adopting the recommendations in the advisory and previous guidance documents, industry stakeholders can reduce their exposure to possible risks associated with recent developments in the maritime oil trade. In addition, the Coalition is issuing this statement to underscore the risks of violating price cap rules," a statement from the G7 and Australia said.
The Price Cap Coalition’s advisory, titled Best Practices in Response to Recent Developments in the Maritime Oil Trade, offers a list of both risks and recommended actions for industry players to take.
Among the recommendations are requiring "appropriately-capitalised P&I insurance" from ships, classification from an International Association of Classification Societies’ member society, best practice use of Automatic Identification Systems, monitoring of ship-to-ship transfer activities, along with due dilligence investigation efforts, policing for inflated ancillary costs in transactions and reporting vessels that are suspected of "illicit or unsafe maritime oil trade".
Riviera Maritime Media’s Tanker Shipping & Trade Conference, Awards & Exhibition will be held 7-8 November 2023 in Athens, Greece. Use this link for further information and to register your interest
© 2023 Riviera Maritime Media Ltd.