The U.S. Treasury Department has indicated that the price cap agreed by the international coalition of G7 countries, the European Union and Australia will not apply when Russian crude oil has been substantially transformed in a jurisdiction other than the Russian Federation through one of the refining processes contemplated.
«Once Russian petroleum products or Russian oil is substantially transformed in a jurisdiction other than the Russian Federation, they are no longer considered to originate in the Russian Federation and, therefore, the price cap no longer applies,» the Office of Foreign Assets Control (OFAC) has explained in preliminary guidance on the implementation of the price cap on Russian petroleum products.
In this regard, the bureau attached to the Treasury Department has noted that it expects to publish by February 5, 2023 a final combined guidance on the implementation of the price cap for Russian oil and Russian oil products.
On the other hand, OFAC has clarified that the price cap will be applied from the beginning of the maritime transportation of Russian petroleum products until the first onshore sale in a jurisdiction other than the Russian Federation so once the derivatives have cleared customs in a jurisdiction other than Russia, the price cap will not apply to any further onshore sales.
In any event, it has indicated that Russian petroleum products loaded on a vessel before February 5, 2023, and discharged at the port of destination before April 1, 2023 «will not be subject to the petroleum products determination» and, accordingly, U.S. service providers may continue to provide services with respect to the products purchased at any price.
It has also explained that petroleum products will not be deemed to originate in the Russian Federation solely because they contain a minimum amount of Russian crude oil derivatives left over from a container or tank.
«For the purposes of assessing whether petroleum products originate in the Russian Federation, Americans may reasonably rely on a certificate of origin, but should be cautious if they have reason to believe that such a certificate has been falsified or is erroneous,» he has warned.
Source: (EUROPA PRESS)
