US Treasury's Russia oil price ceiling guidance provides safe harbor for maritime service firms

The US Treasury on Friday issued new guidance on the Western-proposed price cap on Russian oil exports, saying maritime services providers will not be held liable for false price information provided by buyers and sellers of Russian crude.

Those who purchase Russian crude at prices above the cap and knowingly provide false documentation could be subject to investigation for sanctions violations, the Treasury said in the guidance, available at cap guidance Governments participating in the cap will share such information to aid oversight, it said. The price cap plan agreed by the G7 rich countries requires participating countries not to provide insurance, financial, brokerage, navigation and other services to oil cargoes priced above a yet-to-be-determined ceiling price for crude oil and petroleum products. These service providers must keep records of Russian oil shipments for five years, the Treasury said. "Where a service provider without direct access to price information reasonably relies on a customer statement, that service provider will not be held liable for potential sanctions violations due to those acting in bad faith seeking to violate or avoid the cap," the guidance said. However, Treasury warned these firms to be "vigilant" for red flags indicating potential smuggling or fraud, including evidence of deceptive shipping practices, refusal to provide requested price information, unusually favorable conditions that may indicate a back-end deal to avoid the price cap, or excessively high service costs. Any signs of manipulated documents, newly established companies and abnormal transportation routes should also raise concern, it said. The Treasury said that the countries participating in the price cap will work together to set price ceilings for Russian crude oil and high-volume and low-volume oil product cargoes. The ministry said agreement on price caps would be reached with the help of a "rotating lead coordinator," suggesting that countries in the coalition would have a temporary leadership role as the plan progresses. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!