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United States authorities have imposed sanctions on three shipping companies headquartered in the United Arab Emirates accusing them of carrying Russian oil that was priced above a cap by Washington and its allies.
The Group of Seven, including the European Union, and Australia have since December 5, 2022, imposed price limits on crude oil and petroleum products from Russia as part of efforts to deprive Moscow of war money. The caps began with $60 per barrel for Russian crude before expanding to include refined products with limits of up to $100 a barrel. The caps for refined products have taken effect since February 5.
“Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is imposing sanctions on three entities and identifying as blocked property three vessels that used Price Cap Coalition service providers while carrying Russian crude oil above the Coalition-agreed price cap”, the Treasury Department said in a press release Thursday.
It accused the vessels Kazan, Ligovsky Prospect and NS Century of engaging in the export of Russian crude above the $60 per barrel cap. The Treasury identified the owners as Kazan Shipping Inc., Progress Shipping Co. Ltd. and Gallion Navigation Inc. respectively.
“The Kazan, Ligovsky Prospect, and NS Century used U.S.-person services while transporting the Russian-origin crude oil”, the media statement said.
“As a result of today’s action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC”, it added.
Any entities where the companies own at least a 50 percent stake have also been 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”, the treasury added. “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”.
The statement said, “This action underscores Treasury’s commitment, alongside its international partners, to responsibly reducing oil revenues that the Russian government can use to bankroll its brutal invasion of Ukraine”.
Meanwhile the European Commission is reportedly considering banning the sale of tankers for crude and oil products to Russia to prevent Moscow from bypassing the price caps through shadow fleets.
The planned action, reported by Reuters Friday citing an official document, includes a potential contractual clause for countries buying such ships obliging them not to resell these vessels to Russia or use them to transport Russian oil or oil products that breach the caps.
“The price cap mechanism relies on an attestation process that enables operators in the supply chain of sea-borne Russian oil to demonstrate that it has been purchased at or below the price cap”, the proposal document was quoted by Reuters as saying.
“To further support the implementation of, and compliance with, this mechanism while increasing barriers to falsification of attestations, [the proposal] introduces a requirement for attestations to also include itemized ancillary costs, such as insurance and freight”.
To contact the author, email jov.onsat@rigzone.com
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