U.S. Treasury Imposes Additional Sanctions on Entities Defying Russian Oil Price Cap

U.S. Treasury Imposes Additional Sanctions on Entities Defying Russian Oil Price Cap

WASHINGTON — December 1, 2023 – The U.S. Department of the Treasury‘s Office of Foreign Assets Control (OFAC) has announced additional sanctions targeting three entities and three vessels engaged in transporting Russian crude oil above the agreed-upon price cap set by the international coalition, known as the Price Cap Coalition.

This move reinforces the United States’ commitment, alongside coalition partners, to curb oil revenues that contribute to funding Russia’s ongoing conflict in Ukraine.

The newly imposed sanctions build on previous actions taken by the Treasury in October and November this year. Deputy Secretary of the Treasury Wally Adeyemo emphasized the significance of enforcing the price cap on Russian oil, stating, “By targeting these companies and their ships, we are upholding the dual goals of the price cap by restricting Russia’s profits from oil while promoting stable global energy markets.”

The Price Cap Coalition, comprising the G7, the European Union, Australia, and other nations, prohibits the import of Russian crude oil and petroleum products while establishing specific price caps for authorized transactions. This collaborative policy aims to reduce Russian oil revenues, which have been used to inflate global energy prices due to the conflict with Ukraine.

The vessels named in the sanctions, NS Champion, Viktor Bakaev, and HS Atlantica, were found to have transported Russian Urals crude oil priced above the agreed $60 per barrel cap, reaching over $70 per barrel after the cap’s implementation in December 2022. Notably, these vessels utilized U.S.-person services during the transport.

The designated entities facing sanctions are UAE-based Sterling Shipping Incorporated (owner of NS Champion), UAE-based Streymoy Shipping Limited (owner of Viktor Bakaev), and Liberia-based HS Atlantica Limited (owner of HS Atlantica). These entities were designated under Executive Order 14024 for operating in the marine sector of the Russian Federation’s economy.

As a consequence of the sanctions, all property and interests in property belonging to the designated entities within the United States or under the control of U.S. persons are blocked. Additionally, any entities owned 50 percent or more by the blocked persons are also subject to blocking. Transactions involving the property or interests in property of the designated entities are prohibited unless authorized by OFAC.

The move comes as part of a broader effort by the international community to address Russia’s actions in Ukraine. The OFAC had previously issued advisories and guidance to the maritime industry to ensure compliance with the price cap and prevent potential evasion.

The Treasury’s commitment to a measured and targeted approach is evident, with the ultimate goal of sanctions being to encourage positive behavioral changes. The effectiveness of OFAC sanctions is not only in designations but also in its willingness to adjust lists in accordance with the law. The recent escalation underscores the global effort to hold Russia accountable while maintaining stability in energy markets.

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