G7+ Oil Price Cap Coalition Revises the Price Cap Compliance Regime

In line with ongoing efforts to crack down on the abuse of the seaborne oil price cap introduced by the G7 and other coalition countries against Russia, new measures were announced aimed at increasing compliance with the cap (the short announcement can be found here). In summary, revisions to the price cap compliance regime are as follows:

• Relevant Coalition service providers will need to receive attestations from their counterparties each time they lift or load Russian oil;
• Supply chain participants with access to itemised ancillary costs (e.g., insurance and freight) will need to share these upon request with entities further down the supply chain;
• Coalition members will provide guidance to their service providers and relevant industry participants, as well as details on the transition period in the coming weeks through their respective domestic processes;
• These changes will support the implementation of the oil price cap and disrupt circumvention by reducing opportunities for bad actors to use opaque shipping costs to disguise oil purchased above the cap;
• The EU has introduced new measures (see below) to more closely monitor the sale of tankers to third countries and prevent that these are used to transport oil priced above the cap.

With regard to the final point above, in December the EU Commission made this announcement regarding the adoption of the 12th package of EU sanctions against Russia. As part of this package the Commission announced the closer monitoring of the sale of oil tankers to help to tackle the “shadow fleet“ used by Russia to circumvent the price cap.

Compliance departments are strongly advised to ensure that appropriate policies, procedures and controls are in place with regard to the oil price cap on seaborne Russian oil transactions as the risk of harsh enforcement in this area across multiple western-aligned jurisdictions seems highly probable.