OFAC gives guidance on Russia oil price cap compliance

As previously reported by WorldECR, the G7 nations and the European Union are introducing a ‘price cap’ or ban on a range of services related to the maritime transportation (described by the US government as a ‘maritime services policy’) of Russian Federation-origin crude oil and petroleum products (‘seaborne Russian oil’). With respect to the maritime transportation of crude oil, the cap will take effect from 5 December, and from 5 February, with respect to maritime transportation of petroleum products.

In a 13 September FAQ, the US Treasury’s Office of Financial Assets Control (‘OFAC’) explains: ‘The maritime services policy, constructed as a ban on services, will have an important exception with respect to shipments of seaborne Russian oil purchased at or below the price cap. This means that importers that purchase seaborne Russian oil at or below the price cap can reliably continue to receive maritime services related to that oil, and service providers in countries implementing the maritime services policy can provide those services for shipments of seaborne Russian oil sold at or below the price cap.’

It further explains that ‘Importers and refiners who want to receive seaborne Russian oil and related maritime services can do so by purchasing the oil at or below the price cap and providing certain documentation or attestations to service providers.’

Amongst other notes and conditions, OFAC points out that the price exception ‘will rely on a recordkeeping and attestation process that allows each party in the supply chain of seaborne Russian oil to demonstrate or confirm that oil has been purchased at or below the price cap. This recordkeeping and attestation process is in addition to standard due diligence a service provider may have in place for sanctions risk, including the risk of violation of the maritime services policy through evasion.’

See the FAQs at: https://home.treasury.gov/system/files/126/cap_guidance_20220909.pdf