By Ruth Tene Natsa, Abuja
A Ukraine-based grassroots organisation Razom We Stand has called on European governments to eliminate loopholes and deliver strong and comprehensive enforcement of the European Union (EU) embargo and G7 price cap on Russian oil that entered into force on 5th December
The Group which is focused on climate and creating a full embargo of Russian fossil fuel sales said “the enforcement includes the application of penalties to non-compliant ships and shipping companies, as well as the introduction of criminal liability for any attempts to circumvent sanctions applied to Russian fossil fuel exports.
Ships that transport unsanctioned Russian oil in violation of the G7 price cap should be permanently banned from entering ports and denied access to any maritime services and insurance” they added
A statement signed by the Groups’ Seniour Communications Manager, Jason Kirkpatrick recalled that On December 5, the G7 group implemented a price cap on Russian oil traded on world markets at $60 a barrel to cut Russian export revenues, and prevent Russia from profiting from its war of aggression against Ukraine, noting “that is the first significant sanction imposed on oil or gas exports from Russia – with the potential to undercut the key revenue stream of the aggressor country”.
Campaign Manager of Razom We Stand, Oleg Savytsky said “To make things work the involvement of any entities in trade of unsanctioned Russian oil or circumvention of related sanctions should be disincentivized by strong penalties. Breaches should be investigated and prosecuted as crimes by all governments that express goodwill to end Russian aggression and invasion of Ukraine. With this message we address the European Parliament, the European Council, and governments of EU member states and G7”,
The statement quoting research group, CREA’s latest findings, stated that “in November most of the Russian oil and oil products were still shipped using tankers with European ownership or insurance, showing that Russia so far had little success in finding alternative shipping and insurance providers so far. This illustrates how strong a set of tools the international price cap coalition has, to force down Russia’s oil revenues by lowering the price cap in the coming months”.
Russian oil exporters will surely seek to find tankers from third countries that could be willing to participate in circumvention of oil sanctions. Strong penalties are necessary to deter shipping companies from violation of sanctions and create incentive for compliance. It is essential to set tough penalties for vessels that don’t comply with the price cap, banning them from eligibility for insurance or entry into EU and G7 ports forever. The same should be applied to all vessels that will be identified as carriers of transhipped Russian oil. Such cases of ship-to-ship transfer of oil in open seas to obscure its Russian origin were repeatedly revealed by journalist investigations and should be covered by penalties and criminal liability for the forging of fake documentation.
Prior to the adoption of the price cap, on 2 December the European Commission put forward a proposal to harmonize criminal offenses and penalties for the violation of EU sanctions and restrictive measures against Russia. This proposed directive, among other things, lists as criminal offenses “trading in goods or services whose import, export, sale, purchase, transfer, transit or transport is prohibited or restricted”, which clearly applies to Russian oil in case of non-compliance with the price cap or operations of the so-called “ghost fleet”.
According to CREA estimates, Russia earned an average of €728 million per day from July 1 to the end of October from the sale of fossil fuels at market prices. Those revenues could fall by about 18%, to €595 million a day, if moderate price caps were to be in place from July 1 to deprive Russia of excess profits. A new oil sanctions tracker developed by CREA is now giving instruments to monitor how the dynamics of Russia’s oil export revenues develop.