Page 114 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΜΑΙΟΣ 2024

GEOPOLITICS & SHIPPING

Since 1 July 2010, when the US Comprehensive Iran Sanctions Accountability and
Divestment Act (CISADA) entered into force, sanctions have been the foreign policy tool
of choice.

THE RUSSIAN OIL

PRICE CAP SCHEME –

WHAT NEXT?

On that date, for the first time, a sanctions programme sought to not just
prohibit the primary trade - in that case, the carriage of Refined Petroleum
Products into Iran - but also target the service providers such as the banks,
flag states, classification societies, and insurers that provided services to the
sanction breaking trade.
Subsequently, programmes targeting trade from the DPRK, Iran, Syria, Ven-
ezuela, and now Russia have been rolled out with monotonous regularity,
creating a degree of legal and factual complexity that is challenging for even
the most determined professional to master. The most recent programme tar-
geting Russia is unprecedented in terms of scale. At the heart of the Russian
sanctions, enacted since February 2022, is the Russian Oil Price Cap Scheme
(the “Scheme”), the objective of which is not to prevent trade but to control
the price of one of the world’s most widely traded commodities, Russian oil.
As the Scheme was being designed throughout the summer and autumn
of 2022, there was an understanding within the EU and the G7 Price Cap
Coalition (the “Coalition”) that the Scheme would only work if the Coalition
engaged with the industry to better understand shipping markets and the
level of knowledge held by the various parties involved in the sale and export
of oil. The industry welcomed this engagement, and the Coalition, for their
part, accepted that shipowners and their financial and technical providers did
not have access to information regarding the price paid for an oil cargo and
should, therefore, be considered Tier III actors. As such, provided a shipowner
and their service providers obtained an attestation from their contractual
counterparty that the cargo was shipped below the price cap and conducted
customary due diligence on the parties involved in the shipment, they could
by Mike Salthouse, avoid prosecution or other sanctions if it subsequently transpired that the oil
Head of External Affairs at NorthStandard carried had in fact been sold above the price cap.

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