OFAC sanctions three more Russian oil price cap busters

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today imposed sanctions on three entities and identified as blocked property three vessels that used Price Cap Coalition service providers while carrying Russian crude oil above the Coalition-agreed price cap.

Treasury says the action underscores its commitment, alongside its international partners, to responsibly reducing oil revenues that the Russian government can use to bankroll its brutal invasion of Ukraine.

Today’s actions follows a similar action taken last month against two entities and two vessels involved in carrying Russian oil above the price cap.

The price cap took effect in December 2022 setting a cap on Russian crude oil at $60 per barrel. The Price Cap Coalition countries, which include the G7, the European Union, and Australia, have agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin unless that oil is bought and sold at or below the specific price caps set by the coalition. These countries are home to many best-in-class financial and professional services, including classification societies and insurers and have also agreed to restrict a broad range of services related to the maritime transport of Russian crude oil and petroleum products unless bought and sold at or below the price cap.

DESIGNATED VESSELS AND ENTITIES

The vessels identified today are the Kazan, Ligovsky Prospect, and NS Century. Treasury says all three engaged in the export of Russian crude oil priced above $60 per barrel after the crude oil price cap took effect and that all three used U.S.-person services while transporting the Russian-origin crude oil.

The designated entities are all United Arab Emirates based. They are:

• Kazan Shipping Incorporated (Kazan Shipping), the registered owner of the Kazan.
• Progress Shipping Company Limited (Progress Shipping), the registered owner of the Ligovsky Prospect.
• Gallion Navigation Incorporated (Gallion Navigation, the registered owner of the NS Century.

“Shipping companies and vessels participating in the Russian oil trade while using Price Cap Coalition service providers should fully understand that we will hold them accountable for compliance,” said Deputy Secretary of the Treasury Wally Adeyemo. “We are committed to maintaining market stability in spite of Russia’s war against Ukraine, while cutting into the profits the Kremlin is using to fund its illegal war and remaining unyielding in our pursuit of those facilitating evasion of the price cap.”

As a result of today’s action, all property and interests in property of the designated entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

ADVISORY

The Price Cap Coalition has also published a Coalition Advisory for the Maritime Oil Industry and Related Sectors. The advisory, which is directed at both government and private sector actors involved in the maritime trade of crude oil and refined petroleum products, provides recommendations concerning specific best practices and, says Treasury, reflects the coalition’s commitment to promoting responsible practices in the industry, preventing and disrupting sanctioned trade, and enhancing compliance with the price cap. Download it HERE.