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Even when the reported sale price started to trade Nevertheless, recent comments suggest that a dif-
above the crude oil price cap of $60, the Coalition ferent view may be forming within the Coalition.
States publically maintained the position that pos- During a visit to London at the end of 2023, the
session of an ostensibly valid attestation and the Deputy Secretary of the Treasury, Wally Adeyemo,
performance of customary due diligence was all that addressed the Royal United Services Institute and
was required to access the so-called safe harbour acknowledged what had been obvious for some
from prosecution. This position has been restated time, namely, that as soon as a sanctions pro-
by Coalition representatives during London Inter- gramme is introduced, those targeted by sanctions
national Shipping Week and at subsequent events. will seek to find ways to circumvent their effects.
In reality, the entire operation of the Scheme is built In May 2023, OFAC issued an alert concerning the
around this position. In circumstances in which a deceptive use of AIS off Russia’s eastern seaboard
shipowner does not know and cannot find out the and subsequently made the first price cap designa-
actual price of the cargo, reliance on an ostensibly tions for price cap infractions in October. The use
valid attestation becomes sacrosanct. If a party’s of secondary sanctions was based on non-Coalition
ability to rely on that attestation were undermined, entities engaging US service providers whilst car-
shipowners, insurers, classification societies, Flag rying crude oil sold at a price above the cap. The
Registries, and banks would have no choice but to move was interesting because, in the early days of
stop performing price cap trades. the Scheme, US officials had publicly stated that
whilst secondary sanctions were not “off the table”,
Is it working? there was no apparent need for them at that time.
So, twelve months on, is the Scheme working? Something must have happened to change that
Certainly, Coalition representatives’ public state- view.
ments suggest they continue to view the Scheme In February, the UK’s OFSI got in on the act, desig-
as a success. Since its introduction on 5 December nating both vessels and management companies
2022, Russian crude oil has consistently been priced engaged in Scheme breaches. More significantly,
at a discount of approximately 20-25% compared all the Coalition members updated their guidance
to Brent crude. On 18 May 2023, OFAC published and specifically the form attestation required,
a Russian Oil Progress Report, listing the Scheme’s which must now confer a right on its beneficiary
success in reducing revenues generated by Russia to receive detailed price information on demand.
from its oil sales despite increasing the volume of its This change of approach seems to be based on
exports, thus achieving its twin goals of maintaining several factors. Firstly, the growth of the so-called
world oil supply whilst at the same time preventing Shadow or Parallel Fleet has been an entirely pre-
Russia from manipulating oil markets to finance its dictable consequence of the Russian sanctions
war in Ukraine. programme yet seems to have caught the Coa-

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