U.S. guidance on implementation of maritime services policy, related price exception for “seaborne Russian oil”
The policy is constructed as a ban on services.
Related price exception for “seaborne Russian oil”
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published preliminary guidance on the implementation of a maritime services policy and related price exception for seaborne Russian oil.
Read the preliminary guidance [PDF 1.1 MB] (September 9, 2022)
Overview
As part of a coalition of countries including the G7 and the European Union (EU), the United States will implement a policy with regards to a broad range of services related to the maritime transportation of Russia origin crude oil and petroleum products (“seaborne Russian oil”).
This ban will take effect on:
- December 5, 2022, with respect to maritime transportation of crude oil
- February 5, 2023, with respect to maritime transportation of petroleum products
This policy—constructed as a ban on services—will have an important exception: jurisdictions or actors that purchase seaborne Russian oil at or below a price cap to be established by the coalition (the “price exception”) will expressly be able to receive such services. This policy is intended to establish a framework for Russian oil to be exported by sea under a capped price and achieve three objectives: (1) maintain a reliable supply of seaborne Russian oil to the global market; (2) reduce upward pressure on energy prices; and (3) reduce the revenues Russia earns from oil after its own war in Ukraine has inflated global energy prices.
The preliminary guidance answers the following questions:
- What seaborne Russian oil will flow to the market?
- How can purchasers or service providers use the framework to import seaborne Russian oil? What is the price exception to the maritime services policy? How can transactions qualify for the price exception?
- Will the maritime services policy prohibit services related to seaborne Russian oil sold at or below the price cap?
- How will the price cap be set?
- Does the price exception authorize the importation of seaborne Russian oil into the United States?
- How can providers of maritime services comply with the price exception?
- How will the recordkeeping and attestation process work?
- What are some possible red flags for price cap evasion?
- How will OFAC enforce the price cap?
- What are examples of permissible vs. prohibited transactions?
For more information on sanctions and other responses to Russia’s war on Ukraine, visit KPMG’s dedicated website.
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