US sanctions firms across UAE, Hong Kong for violating Russian oil price cap, issues new compliance rules for shippers

The United States implemented new sanctions on Wednesday targeting alleged violators accused of breaching the $60 per barrel price cap on Russian oil, alongside reinforcing compliance regulations for insurance firms and shippers.

Several firms based in the United Arab Emirates and Hong Kong were identified for economic sanctions, including UAE-based Sun Ship Management D Ltd., owned by Russian state-operated fleet operator Joint Stock Company Sovcomflot.

Additionally, Hong Kong-based Covart Energy, which has expanded its involvement in the trade of Russian oil following the implementation of the price cap policy and Hong Kong-based Bellatrix Energy, were also subject to sanctions.

Firm administrators were not available for comment to The Associated Press. The sanctions, which follow others imposed this year on shippers of Russian oil priced above the cap, block their access to their U.S.-owned property and prevent U.S. individuals and firms from doing business with the groups.

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The price cap coalition also announced Wednesday that it will soon require service providers, including shippers and movers of Russian oil, to receive attestations from their purchasers and sellers each time they lift or load Russian oil.

The coalition will also require insurance and freight firms to share these documents upon request with entities further down the supply chain, a Treasury news release states.

Deputy Treasury Secretary Wally Adeyemo said the sanctions “demonstrate our commitment to upholding the principles of the price cap policy, which advance the goals of supporting stable energy markets while reducing Russian revenues to fund its war against Ukraine.”

“Participants in the maritime transport of Russian oil," he said, “must adhere to the compliance guidelines agreed upon by the Price Cap Coalition or face the consequences.”

The United States, European Union, countries in the Group of Seven and Australia, imposed a $60 a barrel limit last year on Russian oil.

Any purchases above the cap would violate the agreed-upon policy. The cap was designed to deprive the Kremlin of revenue to fund its war in Ukraine, forcing the Russian government either to sell its oil at a discount or divert money for a costly alternative shipping network.

The price cap was rolled out to equal parts skepticism and hopefulness that the policy would stave off Russian President Vladimir Putin’s invasion of Ukraine.

In addition to the price cap, the allied nations have hit Russia with thousands of sanctions over the course of the nearly three-year war. The sanctions are aimed at bank and financial transactions, technology imports, manufacturing and Russians with government connections.

With inputs from AP.