OFAC Expands Prohibitions on Russian Crude Oil Trade

OFAC determined that Executive Order 14071 ("Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression") applies to the maritime transportation of Russian Federation-origin crude oil and petroleum products purchased under a certain price cap. The services affected include trading/commodities brokering, financing, shipping, insurance, flagging and customs brokering.

A carveout in the determination permits the provision of such services "when the price of the crude oil of Russian Federation origin does not exceed the relevant price cap determined by the Secretary of the Treasury, in consultation with the Secretary of State." OFAC's determination will become effective at 12:01 a.m. on December 5, 2022 and does not apply to services relating to crude oil loaded onto a transport prior to the effective date and unloaded prior to 12:01 a.m. on January 19, 2023. This determination implements the maritime services policy that was announced by Treasury and a coalition of U.S. allies in September.

OFAC also issued guidance to U.S. service providers to help them comply with the new prohibitions. OFAC said that providers that comply in good faith with a recordkeeping and attestation process will likely avoid any enforcement action. OFAC also issued Russian General License No. 55, General License No. 56 and General License No. 57 in connection with the determination.