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OFAC Issues Preliminary Guidance on Price Cap for Russian-Origin Petroleum Products

Washington D.C. (January 11, 2023) - On December 30, 2022, Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued preliminary guidance on the implementation of a price cap exception to the ban on maritime transportation of Russian-origin petroleum products. Several weeks earlier, on November 21, 2022, OFAC issued similar guidance on the implementation of the price cap policy for Russian-origin crude oil. (See our previous alert from December 5, 2022, “Crude D'Etat - OFAC Implements Policy & Guidance Relative to Price Caps on Crude Oil Originating from Russian Federation.”)

OFAC noted that it expects to take a very similar approach for implementing the price cap policy on petroleum products as it has done for the policy on crude oil. To that end, OFAC will issue a determination pursuant to Executive Order 14071 that will cover the same categories of services as the crude oil determination and will take effect on February 5, 2023. OFAC anticipates issuing a separate determination to set the actual price caps for the petroleum products. OFAC also intends to extend the authorizations in General Licenses 56 and 57 to the petroleum products determination.

Lewis Brisbois’ Ukraine Conflict Response Team will continue to monitor for OFAC sanctions updates and determinations. If you have any questions about these policies, please contact the author of this post or any member of the Response Team.

Author:

Rebecca Stoddard, Associate

Editors:

Jane C. Luxton, Managing Partner - Washington, D.C.

Andrew Pidgirsky, Partner

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