On October 31, 2022, the US Department of the Treasury’s Office of Foreign Assets Control issued Frequently Asked Question 1094 to address the transport of crude oil of Russian origin subject to the price cap. According to FAQ 1094, if crude oil of Russian origin is loaded onto a vessel at the port of loading for maritime transport prior to December 5, 2022, it will not be subject to the price cap (also known as the “maritime services policy”) as long as the oil is unloaded at the port of destination prior to January 19, 2023.
The FAQ 1094 addresses and further clarifies the provisions set out in the Treasury Department’s Preliminary Guidance on Implementation of a Maritime Services Policy and Related Price Exception for Seaborne Russian Oil, published on September 9, 2022, in order to establish a framework for Russian oil to be exported by sea under a capped price. According to FAQ 1097 and the preliminary guidance, OFAC plans to implement the maritime services policy by publishing a determination pursuant to Executive Order 14071 that will i) permit the export, reexport, sale or supply of Russian origin crude oil or petroleum products, from the US or by a US persons, wherever located, as long as the price of the products do not exceed the price cap, and ii) prohibit such services for Russian oil that is purchased above the price cap. The determination would take effect on December 5, 2022 with respect to the maritime transportation of crude oil and on February 5, 2023 with respect to the maritime transportation of petroleum products. While the preliminary guidance expressly indicates that this policy will be constructed as a ban on services, the only exception will be for jurisdictions or actors that purchase seaborne Russian oil at or below a “price cap exception” that will be established by a coalition of countries, including the G7, the EU, and the US.
FAQ 1094 | Preliminary Guidance – September 9, 2022