Reed Smith Client Alerts

On 3 November 2022, the UK implemented the Russia (Sanctions) (EU Exit) (Amendment) (No. 16) Regulations 2022, which amended the Russia (Sanctions) (EU Exit) Regulations 2019 further by, amongst others, introducing a prohibition on maritime services for the supply or delivery of Russian origin or Russian consigned oil.

On Monday, 14 November 2022, the UK’s Office of Financial Sanctions Implementation (“OFSI”) published its “UK Maritime Services Prohibition and Oil Price Cap Guidance” (“UK Price Cap Guidance”).

This string of developments by the UK follows the EU’s eighth sanctions package, which introduced an amended Article 3n relating to non-EU-bound maritime voyages of Russian oil products and OFAC’s equivalent guidance of 9 September 2022. We discussed this in an earlier client alert.

UK Maritime Transportation and Services Ban – New Chapter 4IA

Chapter 4IA operates by imposing a ban on maritime transportation and related services of oil products with HS Code 2709 (crude) and 2710 (other petroleum products) that are of Russian origin or consigned from Russia (“Restricted Oil Products”). This maritime transportation and services ban applies only to maritime voyages between Russia and a non-UK country or between two non-UK countries.

These restrictions apply from 5 December 2022 for HS Code 2709 products and from 5 February 2023 for HS Code 2710 products. As expected, these timings align with the EU’s approach, as well as the intent of the U.S. as stated in OFAC’s 9 September 2022 guidance.

Such activity will only be permitted if the purchase price of the Restricted Oil Products is at or below the relevant price cap as stated in the relevant UK General Licence (“GL”). This GL has yet to be published, and the level of the ‘cap’ remains unknown. The UK has stated that the GL, along with additional general licences to ensure international alignment and the smooth operation of the price cap, will be published before 5 December 2022.