November 20, 2023

US imposes sanctions in response to price cap violations

On November 16, 2023, the US Department of the Treasury’s Office of Foreign Assets Control designated 3 United Arab Emirates–based companies for utilizing Price Cap Coalition service providers while carrying Russian crude oil above the established price cap of $60 per barrel.  OFAC also identified 3 vessels, which are owned by the newly-designated companies, as blocked property.  The 3 companies were designated pursuant to Executive Order 14024 for operating or having operated in the marine sector of Russian economy, and the vessels were blocked for their association with the designated companies.  As a result of these designations, all property and interests in property of the 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 a designated person.  In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.

On the same day, OFAC issued General License 77 pursuant to Russian Harmful Foreign Activities Sanctions Regulations (“RuHSR”) to temporarily authorize limited safety and environmental transactions involving the companies designated and vessels blocked in accordance with RuHSR.  The payments authorized by GL 77 are permitted until February 14, 2024, provided that payments make to blocked persons are made into blocked accounts in accordance with the RuHSR.  More specifically, GL 77 authorizes transactions involving the following blocked persons as well as vessels listed on OFAC’s Specially Designated National and Blocked Persons (“SDN”) List, and to any entity in which the following persons, individually or in the aggregate, own a 50 percent or greater interest:

• Kazan Shipping Incorporated;
• Progress Shipping Company Limited; or
• Gallion Navigation Incorporated.

Department of Treasury Press Release | General License 77