OFAC Continues To Allow Importation of Discrete Russian Oil Shipments Into Japan

Washington, D.C. (July 10, 2025) - On June 18, 2025, the Office of Foreign Assets Control (OFAC) issued the fourth iteration of General License 55 (GL 55D) to continue authorizing certain services related to the maritime transport of Russian crude oil that originated from the Sakhalin-2 project (Sakhalin-2 byproduct), as long as the Sakhalin-2 byproduct is solely for importation into Japan. This is an exception to the prohibition in Executive Order 14071 barring services that facilitate the maritime transport of crude oil of Russian Federation origin.

Specifically included in the GL 55D authorized exception are transactions prohibited by Executive Order 14024 involving Gazprombank Joint Stock Company (Gazprombank) or any entity in which Gazprombank owns, directly or indirectly, a 50 percent or greater interest (all are OFAC sanctioned entities), that are related to the Sakhalin-2 project, including such transactions involving Sakhalin Energy LLC, through 12:01 a.m. eastern standard time, December 19, 2025.

In a determination made by the Treasury Secretary on January 10, 2025, the “energy sector of the Russian Federation economy” comes under the purview of section 1(a)(1) of Executive Order 14024, which provides economic sanctions on any person operating in Russia’s energy sector. GL 55D provides an exception to transactions prohibited by this determination if these transactions are related to the Sakhalin-2 project.

Why the special exception allowing importation of Russian controlled petroleum products solely into Japan? Sakhalin is an island just 25 miles north of Japan and its history is marked by shifting control between Japan and Russia. It was settled by both Japanese and Russians and currently is controlled by Russia. In the early 1920’s, Japan controlled Sakhalin and begun oil production and exported oil to Japan. After World War II, Russia obtained control, and while there is no formal peace treaty between Japan and Russia, Japan has continued to import oil from Sakhalin.

The primary reason for OFAC’s originally issuing GL 55 is to manage potential disruptions to global energy markets, particularly in Japan, by allowing continued access to oil and gas from Sakhalin-2 while still adhering to the broader goals of the Russia sanctions program. This narrow exception is because Sakhalin-2's output is a significant energy source for Japan, and the sanctions regime could have unintended adverse consequences for Japan's energy security.

Lewis Brisbois’s attorneys are actively engaged in the wide range of legal issues in this area and are advising clients on managing legal and business risk as events continue to develop at an accelerated pace. For more information, contact the author or editors of this alert. Visit our Ukraine Conflict, International Trade, Export, Import and Investment Controls & National Security Practice page for additional alerts in this area.

Author:

Thomas A. Brooks, Partner

Editors:

Andrew Pidgirsky, Partner and Chair of Ukraine Conflict, International Trade, Export, Import and Investment Controls & National Security Practice

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