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  • UK bans import of Russian oil and oil products from 5 December and introduces oil price cap guidance
  • 2022 December 5 10:35

    UK bans import of Russian oil and oil products from 5 December and introduces oil price cap guidance

    The guidance produced by OFSI covers the provision of maritime transportation of, and associated services for the maritime transportation of, certain Russian oil and oil products, according to the GOV.UK's release.

    Banning the import of both Russian oil and oil products from 5 December 2022 is intended to reduce the size of the global market for Russian oil and oil product exports. This import ban is dealt with in the BEIS guidance.

    Banning the maritime transportation of Russian oil from 5 December 2022 and refined oil products from 5 February 2023 applies to the maritime transportation of the oil and oil products from Russia to a third country, or from one third country to another third country – i.e., countries that are neither the UK, the Isle of Man, or Russia.

    To smooth the transition into the operation of the price cap, the UK will introduce a wind-down period on oil already loaded on ships before 5 December. The UK will permit contracts to ship Russian oil traded at a price above the price cap which are loaded before 5:01 am GMT on 5 December 2022 and will be delivered and clear customs in a third country before 5:01 am GMT on 19 January 2023.

    The maritime transportation ban prohibits the supply or delivery by ship oil and oil products (which originate in Russia or are consigned from Russia) from a place in Russia to a third country, or from one third country to another third country.

    • This includes the transfer of goods between ships.

    • A person supplying or delivering the oil or oil products includes a person who owns, controls, charters or operates a ship.

    • The definition of ship includes every description of a vessel (including a hovercraft) used in navigation, except the naval, military or air-force ships of any country.

    This prohibition applies to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world.

    The UK regulations prohibit the provision of financial services, funds, or brokering services in pursuance of, or in connection with, an arrangement whose object or effect is the supply or delivery by ship oil and oil products, from a place in Russia to a third country, or from one third country to another third country.

    Whether or not goods “originate” in Russia will be determined in accordance with the non-preferential rules of origin.

    A ‘price cap’ exception will be provided for the supply or delivery by ship of Russian oil and oil products and associated services.

    This price cap exception will permit the supply or delivery by ship of Russian oil and oil products, as well as provision of associated services, only where they have been purchased or sold at or below a corresponding set price, or ‘cap’ for that oil or oil product, regardless of destination.

    The price cap exception is not applicable to the import of Russian oil and oil products into the UK and does not overrule any prohibitions enacted by third countries on the import of Russian oil and/or oil products into their own jurisdictions.

    There are two exceptions in the regulations to the prohibitions on the provision of maritime transportation and associated services for Russian oil and oil products. The first exception is for when dealing with an emergency. The prohibitions will not apply to any person performing an act that assists with the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health or safety, infrastructure, or the environment. Any person purporting to act under this exception, must notify OFSI within 5 working days of the act.

    The second exception permits activity that would otherwise be prohibited, where the oil and oil products do not originate in Russia, are not owned by a person connected with Russia, and are only being loaded in, departing from or transiting through Russia.

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