WASHINGTON, November 16, 2023 – In a significant move aimed at curbing financial support for Russia’s invasion of Ukraine, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on three maritime entities and designated three vessels as blocked property.
These entities were found to have used Price Cap Coalition service providers while transporting Russian crude oil above the agreed-upon price cap.
Deputy Secretary of the Treasury Wally Adeyemo emphasized the Treasury’s commitment, in collaboration with international partners, to responsibly reduce oil revenues that the Russian government could exploit to fund its military actions in Ukraine. The sanctions target the vessels Kazan, Ligovsky Prospect, and NS Century for engaging in the export of Russian crude oil priced above the Coalition-agreed cap of $60 per barrel.
The United States is part of the Price Cap Coalition, a multinational alliance including the G7, the European Union, and Australia, committed to prohibiting the import of Russian crude oil and petroleum products. This coalition also restricts various services related to the maritime transport of such products unless they adhere to specific price caps or are authorized by a license.
Deputy Secretary Adeyemo issued a warning to shipping companies and vessels participating in the Russian oil trade, emphasizing accountability for compliance. The objective is to maintain market stability while cutting into the profits the Kremlin utilizes to fund its illegal war.
The sanctions were triggered by violations of the December 2022-implemented crude oil price cap, set at $60 per barrel for Russian crude oil. The vessels Kazan, Ligovsky Prospect, and NS Century were found to have transported Russian-origin crude oil priced above this cap, utilizing U.S.-person services during the process.
The sanctioned entities include United Arab Emirates-based (UAE-based) Kazan Shipping Incorporated (Kazan Shipping), Progress Shipping Company Limited (Progress Shipping), and Gallion Navigation Incorporated (Gallion Navigation). These entities were designated pursuant to Executive Order 14024 for their involvement in the marine sector of the Russian Federation economy. The Kazan, Ligovsky Prospect, and NS Century were identified as property in which the respective entities have an interest.
As a consequence of the sanctions, all property and interests in property of the sanctioned entities within the United States or under the control of U.S. persons are blocked and must be reported to OFAC. Additionally, any entities owned 50 percent or more by these blocked persons are also subject to the sanctions. All transactions involving the designated entities’ property are prohibited unless authorized by OFAC.
The move follows the October 12, 2023, publication of the Coalition Advisory for the Maritime Oil Industry and Related Sectors, reinforcing the commitment to responsible practices and compliance with the price cap in the industry. OFAC had previously issued an Alert on Possible Evasion of the Russian Oil Price Cap on April 17, 2023, and Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin on February 3, 2023.
