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The UK’s financial sanctions enforcement body has urged companies and banks involved in the seaborne oil trade to closely scrutinise shipping documents, warning of potential attempts to evade the US$60 cap on Russian oil.

In an advisory issued on November 21, the Office of Financial Sanctions Implementation (OFSI) said it has “identified instances” of companies seeking to disguise the origin of Russian oil and petroleum products.

It says these attempts were made by fabricating or falsifying certificates of origin (COs).

The UK has prohibited the import of oil and petroleum products from Russia and backs the oil price cap scheme. Since late 2022, countries in the G7, European Union and Australia have banned businesses from providing services that facilitate seaborne Russian oil exports, such as shipping, insurance and trade finance, unless the price is below US$60 per barrel.

But despite these measures, there has been evidence of western companies providing insurance to vessels carrying Russian oil sold above the cap and Moscow has also developed a shadow fleet to mitigate the impact of the scheme.

Experts say the OFSI announcement indicates western nations are gearing up for stronger sanctions enforcement.

“OFSI has followed hot on the heels of recent OFAC [US Office of Foreign Assets Control] and G7 communications, all of which are laser focused on the maritime sector. It’s clear that a more aggressive investigations and enforcement landscape is just around the corner,” says David Savage, a partner at law firm HFW.

In October, ministers from the G7 nations vowed to take “further initiatives” to curb violations of the Russian oil price cap, though did not outline details of the plan.

Days later, OFAC, the US sanctions enforcement agency, issued a “scenario-based” communique to the maritime industry highlighting the potential tactics deployed by states such as Iran and Russia to evade sanctions, such as ship-to-ship transfers and manipulating automatic identification system data.

Savage says the UK advisory is “aimed at anyone involved in the trade of oil where there may be a Russian nexus”.

“Banks, brokers, commodities houses, vessel owners and refiners are just some of the industry players that need to take note of what OFSI is saying,” he tells GTR, while noting breaches of the oil price cap can result in “significant fines” and reputational damage.

James Ford, a senior associate at law firm Mayer Brown, says UK companies that fail to “take heed of the guidance” could potentially expose themselves to the risk of OFSI enforcement action.

“The fact that OFSI sees cause to issue a standalone advisory on the fabrication or falsified certificates of origin to obscure the Russian origin of oil and oil products suggests that this is an emerging theme that OFSI has seen across the sector,” he says.

The guidance outlines various red flags that should “trigger increased due diligence” of a transaction, such as a CO document naming a country that does not typically produce oil or which is a relatively small oil producer.

The notice also says those dealing with oil cargoes should be aware of COs that list a product as being non-Russian, but vessel tracking information shows the goods “initially came from Russia and no substantial processing of the oil has taken place off the water in a third country”.

UK companies should also seek to ensure certificates – which can come in paper or electronic form – are authorised by a relevant authority.

“For example, in Malta, the authorities have confirmed that only The Malta Chamber of Commerce, Enterprise and Industry is allowed to authorise COs and that private entities are not allowed to issue such COs,” it says.

Outside of the price cap, Moscow has also developed a vast shadow fleet of ageing tankers that export its oil to friendly markets such as China and India without the use of western-operated vessels or services.

In September, the Russian government forecast that it would earn nearly US$240bn from oil and gas exports this year, US$13bn higher than 2023.

Last week, the European Parliament formally adopted a proposal to ban all EU imports of Russian oil and petroleum products, as well as purchases of fuel from refineries that use Russian crude.

The proposal also outlined a crackdown on Russia’s shadow fleet, including systematically imposing sanctions on any vessel sailing through EU waters without known insurance and granting ports the authority to seize illegal cargo without compensation.