OFAC Warns of Deceptive Practices in Russian Oil Trade


Treasury's Office of Foreign Assets Control (OFAC) has issued a warning to shipowners, protection and indemnity clubs, and flagging registries about deceptive practices involving Russian oil exports.

OFAC is aware of reports that crudes exported via Pacific ports in the Russian Federation, such as Kozmino, may be trading above the price cap and using covered services provided by U.S. persons.

These service providers may be unknowingly involved in the trade due to false or incomplete documentation and other deceptive practices.

One such deceptive practice is the manipulation of Automatic Identification Systems (AIS) on tankers, a practice known as "spoofing." This tactic is used to disguise port calls to Kozmino or other Russian Federation eastern coastline ports. Spoofing can also be employed to mask ship-to-ship transfers, effectively hiding the origin of Russian oil.

U.S. service providers are urged to view AIS manipulation as evidence of potential evasion of the price cap.

For commodities brokers and oil traders, OFAC emphasizes the importance of transparent shipping costs. Shipping, freight, customs, and insurance costs should be invoiced separately from the purchase price of Russian oil and must be at commercially reasonable rates.

Failure to itemize these costs can be used to obscure the fact that Russian oil was purchased above the price cap. Refusal by a counterparty to provide documentation showing that the oil was purchased at or below the price cap should be considered a red flag for potential evasion.


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