Sanctions

The United Nations and individual countries have imposed sanctions against certain countries around the world for a variety of reasons, ranging from economic and trade to more targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions.

The purpose of these sanctions is to peacefully bring about some sort of change within the country affected. INTERTANKO assists Members in dealing with sanctions in two major ways. First, ensuring that any sanctions imposed that may affect Members’ tanker operations are fair, reasonable and practical to implement. And second, to ensure that all Members are fully aware of any sanctions that could affect their tanker operations, thereby minimising the possibility of violating the sanction and avoiding potential penalties or trade restrictions.

INTERTANKO has developed a standalone model sanctions clause and considers the impact of sanctions in the development of chartering provisions.

You will find more information on current sanctions in the 'Key Resources' tab at the bottom of this page (login required).

For further information on INTERTANKO's sanctions activities, please contact Tim Wilkins: tim.wilkins@intertanko.com

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Clarity on price cap compliance, sanctions and the shadow fleet

The G7, EU, Australia and Japan (G7+) have introduced sanctions that ban the import of Russian oil (crude and products) to G7+ countries. The introduction of price cap requirements has seen the emergence of a trade of Russian oil on tankers, commonly referred to as the shadow fleet, that can be identified as:

Tankers that operate outside the boundaries of the G7+ oil price cap requirements by establishing ownership or control (e.g. decisions about the route and crew appointment) outside of the G7+ countries
By operating outside the sanctions laws, these tankers will likely:

• not adhere to the well-established and strict industry standards and best practices
• not be subjected to statutory inspections by port States and flag Administrations
• not have adequate or sufficient liability insurance, not be subject to commercial screenings and inspections
• not be operated under a transparent and sustainable corporate governance policy that assures the welfare and safety of those on board and protects the marine environment.

An open dialogue was established at a meeting in London between INTERTANKO, the European Commission and the United Kingdom’s Office for Financial Sanctions Implementation (OFSI). INTERTANKO is assisting the authorities by sharing information on industry best practices on sanctions compliance and due diligence. The development and promotion of best practice on sanctions by INTERTANKO Members are seen as a positive and proactive step in establishing clarity on compliance with the price cap requirements.

Background
The G7+ sanctions extend to a ban on the maritime transportation of Russian oil. The sanctions also ban the provision of financial and maritime services which facilitate maritime transport, such as insurance and ship management.

The G7+ sanctions introduce an exception through the use of price cap requirements which are intended to maintain the supply of Russian oil to world markets while reducing Russia’s earnings from its oil exports.

Under the price cap* requirements, ships may continue to lawfully carry Russian cargo to countries which are not part of the G7+ price cap coalition, provided that the price of the Russian cargo, from the time it is loaded until it has cleared customs at the port of destination, is at or below the price cap.

Shipowners, charterers and insurers are now required to check the price of Russian oil cargoes on board ships they own, charter or insure. These checks will be underpinned by contractual attestations provided by their contractual counter parties, stating that for the relevant period the price will not exceed the price cap.

*Price caps have been placed on crude (USD 60/bbl on 5 December) and refined petroleum products ('discount to crude oil’, e.g. naphtha and residual fuel oil, set at USD 45/bbl and ‘premium to crude oil’, e.g. gasoline and kerosene, set at USD 100/bbl on 5 February. 

Sanctions tools
See below for model sanctions clauses, due diligence questionnaires and model process (login required - Members/Associate Members please contact webmaster@intertanko.com if you require a login):

• INTERTANKO Model Sanctions Clauses and Due Diligence Tools (downloadable pdf)
• Sanctions – INTERTANKO due diligence questionnaires and model process
• Sanctions Questionnaire for Load/Discharge
• Standard Sanctions Questionnaire – STS/Lightering
• Sanctions - Model Sanctions Clauses for Time and Voyage Charterparties

For further information on INTERTANKO's sanctions activities, please contact Tim Wilkins: tim.wilkins@intertanko.com