On December 1, 2023, the U.S. Department of the Treasury’s Office of Foreign Assets control (OFAC) announced the imposition of sanctions on three entities and identified as blocked property three vessels that used Price Cap Coalition services while carrying Russian crude oil above the Coalition-agreed price cap.
OFAC found that the vessels, NS Champion, Viktor Bakaev, and HS Atlantica carried Russian Urals crude oil priced above $70 per barrel after the crude oil price cap took effect and used U.S. services while transporting the Russian-origin crude oil. The registered owners of these vessels (United Arab Emirates-based (UAE-based) Sterling Shipping Incorporated, UAE-based Streymoy Shipping Limited, and Liberia-based HS Atlantica Limited, respectively) were designated as Specially Designated Nationals (“SDNs”) by OFAC pursuant to Executive Order 14024 for operating or having operated in the marine sector of the Russian Federation economy. Because the three vessels are property in which these newly designated entities have an interest, the vessels are blocked as well.1
These sanctions are the latest in a series of Price Cap designations from October and November of this year, representing OFAC’s commitment to enforcement of the Price Cap Policy. The designation of these entities as SDNs demonstrates OFAC remains focused on identifying violations of the Price Cap regulations and will impose harsh sanctions on those involved. Indeed, in its press release, OFAC reiterated that “[e]nforcement of the price cap on Russian oil is a top priority for the United States and our Coalition partners.”
We will continue to closely monitor developments in this space.
1 OFAC also issued General License No. 78 which authorizes transactions related to: (i) the safe docking and anchoring of any of the blocked vessels; (ii) the preservation of the health or safety of the crew of any of the blocked vessels; and (iii) emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
