October 15, 2023

OFAC designates entities and identifies vessels for violating price cap policy

On October 12, 2023, the US Department of the Treasury’s Office of Foreign Assets Control designated two entities – United Arab Emirates-based Lumber Marine SA and Türkiye-based Ice Pearl Navigation Corp – for transporting Russian crude oil priced above the Price Cap Coalition’s established price cap.  The two vessels used to transport the Russia-origin oil – the SCF Primorye and the Yasa Golden Bosphorus – were also identified as blocked property.  According to OFAC, both vessels conducted port of calls in the Russian Federation and used US-based services providers while transporting the Russian origin oil.  These sanctions were imposed pursuant to Executive Order 14024, which targets those who operate in key sectors of the Russian economy.  As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons.  In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.

OFAC also issued General License 73 to authorize certain payments related to safety and environmental transactions involving the newly designated entities (and any entity in which they own a 50 percent or greater interest) and identified vessels – payments that would otherwise be prohibited by EO 14024.  The general license authorizes these payments until January 8, 2024 provided that any payment to a blocked person be made into a blocked account in accordance with Russian Harmful Foreign Activities Sanctions Regulation, 31 CFR par 587.

These sanctions coincide with the Price Cap Coalition’s publication of an advisory for those involved in the maritime trade of crude oil and refined petroleum products in both the public and private sectors.  The advisory provides industry actors with recommendations meant to encourage responsible industry practices, prevent and disrupt sanctioned trade, and enhance price cap compliance.  The Coalition also issued a statement to address the new US sanctions in order to underscore the risks of violating price cap rules and confirm the Coalition’s commitment to imposing Russia-related sanctions in response to its unjustified and unprovoked war with Ukraine.

Department of Treasury Press Release – OFAC Sanctions | Department of Treasury Press Release – Advisory | Advisory for the Maritime Oil Industry and Related Sectors | Price Cap Coalition Statement | General License 73