U.S. OFAC publishes FAQ concerning price cap and petroleum products from Russia
Russia-related “frequently asked question”
Russia-related “frequently asked question”
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today issued the following Russia-related “frequently asked question” (FAQ 1109).
1109. Are petroleum products of Russian Federation origin that are loaded onto a vessel at the port of loading for maritime transport prior to February 5, 2023 subject to the price cap?
No, provided the petroleum products are unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023. Petroleum products of Russian Federation origin that are loaded onto a vessel at the port of loading prior to 12:01 a.m., eastern standard time, February 5, 2023, and unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023, are not subject to the price cap. U.S. service providers can continue to provide services related to the maritime transport of petroleum products of Russian Federation origin purchased at a price above the price cap, provided that the petroleum products are loaded onto a vessel at the port of loading for maritime transport prior to 12:01 a.m., eastern standard time, February 5, 2023, and unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023.
The following is an example of a permissible transaction:
• A U.S. commodities trader signs a contract on January 1, 2023, to purchase petroleum products of Russian Federation origin for shipment to a jurisdiction that has not prohibited the import of such petroleum products. The U.S. commodities trader arranges for the petroleum products to be loaded onto a vessel at the port of loading. The vessel is loaded on February 1, 2023, and a bill of lading is issued. The petroleum products are shipped and discharged at the port of destination on February 15, 2023. U.S. insurance companies provide cover for this shipment/voyage and pay out any related claims, as appropriate.
OFAC anticipates implementing the price cap on petroleum products of Russian Federation origin by publishing a determination pursuant to Executive Order 14071 that (i) permits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of services related to the maritime transport of petroleum products of Russian Federation origin, where the price of such petroleum products of Russian Federation origin do not exceed the price cap and (ii) prohibits such services if the petroleum products of Russian Federation origin are purchased above the relevant price cap. This determination would take effect at 12:01 a.m., eastern standard time, February 5, 2023, with respect to maritime transport of petroleum products of Russian Federation origin loaded on or after 12:01 a.m., eastern standard time, February 5, 2023.
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