In a Nutshell: in two recent announcements on 10 and 15 January 2025, the U.S. Department of the Treasury unveiled new sanctions targeting Russia's oil production and exports, affecting major oil companies, insurers, oil traders and some maritime players and has further strengthened previous sanctions by implementing a worldwide ban on conducting business with various sanctioned entities. In one of the final acts of the Biden administration, U.S. Department of the Treasury has intensified its sanctions against Russia by targeting its shadow fleet and oil and gas industries.

What are the new sanctions?

On 10 January 2025, the U.S. Department of the Treasury has implemented further sanctions against ship management companies and Russian oil producing companies. It has blacklisted two major Russian oil producers, Gazprom Neft and Surgutneftegas, together with more than two dozen of their subsidiaries. The China-based technology company, Zhoushan Wison Offshore and Marine, has also been added. The Treasury Department has also sanctioned two Russia-based maritime insurance providers, Ingosstrakh Insurance Co and Alfastrakhovanie Group, entities which the United Kingdom sanctioned last year. It is important to recall that companies that are not sanctions-listed, but are controlled directly or indirectly by a sanctions-listed company are also considered to be subject to blocking sanctions.

The sanctions also target 183 vessels, mainly oil tankers and LNG carriers, owned by a wide range of entities, from a Russia state-owned shipping company to southeast Asia based ship managers. The full list of vessels may be found here.

Notably, two ship management companies based in the United Arab Emirates, which oversaw vessels during their port calls in the Russian Federation, have been sanctioned. Additionally, Sao Viet Petrol Transportation Company Limited, a Vietnamese ship owner, and Prominent Shipmanagement Limited, a Hong Kong-based ship manager, have also been blacklisted by the Treasury Department.

Subsequently, on 15 January 2025, the Treasury Department re-designated a number of entities on their sanctions' list. This means that foreign individuals, including financial institutions, facilitating significant transactions for or on behalf of the entities named in the Treasury Department's release (see here), may become subject to U.S. sanctions, increasing the risk of secondary sanctions for companies interacting with those listed entities.

EU and UK developments

On 16 December 2024, the EU adopted its 15th sanctions package against Russia. This package aims to prevent the circumvention of EU sanctions by targeting the Russian shadow fleet and undermining Russia's military and industrial capabilities. Apart from several shipping companies, the new sanctions package now contains a total of 79 vessels (the list can be found here). This new package also prohibits the enforcement of judgments in which Russian courts claim jurisdiction under Article 248 of the Russian Arbitrazh Procedural Code. Decisions taken under Article 248 are also known as "anti-suit injunctions" and prevent parties from pursuing legal proceedings outside of Russia.

In parallel, on 25 November 2024, the UK government announced its most extensive sanctions' package relating to the Russian shadow fleet to date. An additional 30 vessels from the shadow fleet were prohibited from accessing UK ports and British maritime services, furthermore on 17 December 2024, the UK government added 20 ships to their sanctions list. The UK government has implemented a UK sanctions' list search which can be accessed here. Moreover, as stated in the Treasury Department's recent press release, the UK has joined the United States in imposing sanctions on the two major oil producers, Gazprom Neft and Surgutneftegas. As an aside, the Office of Trade Sanctions Implementation (OTSI) published on 7 January 2025 two guidance documents to support the UK's export industry in countering Russian sanctions' circumvention.

The EU's 15th sanctions' package and the UK's extensive measures against Russian vessels significantly bolster the international sanctions regime by targeting key maritime assets, with both regions aligning their efforts to undermine Russia's military and industrial capabilities.

Summary

The most recent U.S. sanctions targeting Russia's oil production, the shadow fleet, and related industries mark a significant intensification of the current sanction regime. However, it remains to be seen how potential policy shifts in the coming months could affect the continuation or modification of these sanctions. As such, stakeholders in the maritime sector should remain vigilant, monitoring any changes following the U.S. presidential inauguration.

If you have any questions, please get in touch with your contact person at EHLERMANN RINDFLEISCH GADOW or with Adam Parmenter or Marta Ron