On 21 November 2024, The Office of Financial Sanctions Implementation (OFSI) issued an advisory to help UK business’ ensure adherence to the price cap on Russian oil and avoid the risks of evasion.
This follows the UK and the EU’s ban on the maritime transportation of Russian oil and oil products, along with associated services in December 2022. This was coupled with the implementation of the Oil Price Cap mechanism, which eased restrictions on maritime transportation of Russian oil but only on the basis that the price the oil is sold is at or below the cap.
Under the price cap regime, UK businesses engaged in or facilitating maritime trade (including insurers) must undertake due diligence to make sure that they are not supporting trades in breach of the price cap.
Industries such as shipping, refining, and fuel trading, which rely on oil imports, are particularly vulnerable to the risks posed by fabricated Certificates of Origin (CO). These sectors face challenges in verifying the true origin of oil due to the complexity of global supply chains, intermediaries, and trading hubs known for ship-to-ship transfers
To ensure compliance and avoid involvement in sanctions violations, UK businesses are advised to conduct rigorous checks on the origin of goods, especially when dealing with COs. OFSI has highlighted the risks of fabricated or falsified COs being used to disguise Russian-origin oil as non-Russian. These fraudulent certificates may list countries with little or no oil production as the source of the oil, which can be contradicted by vessel tracking data showing shipments from Russian ports.
To read the full article, please click here https://kennedyslaw.com/en/thought-leadership/article/2024/understanding-the-oil-price-cap-advisory-and-risks-of-evasion-through-falsified-certificates-of-origin/
