The European Union (EU) adopted its 8th sanction package on October 6, 2022, due to Russia’s ongoing invasion of Ukraine. In connection with this, the EU published Regulation 2022/1904, which further amends the 2014/833 Regulation and is significant for P&I Clubs and their Members (“MEMBER”). The regulation includes the freezing of assets of several new individuals and entities, along with the following provisions specifically related to maritime transport.

RUSSIAN MARITIME REGISTER (RUSSIAN REGISTER OF SHIPPING)

The Russian Register of Shipping (Russian Maritime Trade Registry) has been added to the list of Russian state-owned entities, and it is now prohibited for any EU entity to conduct transactions directly or indirectly with it. However, contracts concluded before October 7, 2022, and any contracts necessary for the execution of these agreements are allowed a transition period until January 8, 2023. Additionally, vessels registered under the Russian Register are prohibited from entering EU ports starting April 8, 2023.

EXTENSION OF RESTRICTIONS ON STEEL PRODUCTS

The list of banned steel products has been expanded in the regulation. Furthermore, new restrictions have been added prohibiting the importation and purchase of steel products processed by third countries but containing Russian-origin steel. The new regulation also includes bans on insurance and reinsurance services provided by EU entities. Therefore, even if a Member is not directly affected by the regulation, it should be noted that the Club will not be able to provide coverage if engaging in these activities.

EXPANSION OF THE LIST OF PRODUCTS

The regulation expands the list of products that will develop Russia’s industrial sector and generate significant revenue. The commodities specified in the annexes of the regulation are subject to a liquidation period until January 8, 2023, for the execution of any contract concluded before October 7, 2022, or any subcontracts necessary for the execution of those contracts.

CAP ON RUSSIAN OIL PRICES

The G7 has imposed a price cap on Russian crude oil and its derivatives. The G7 price cap limits the price of Russian oil exports to the world. This is intended to prevent Russia from generating high revenues by lowering the sales of crude oil and derivatives during a period when energy prices are rising. The transportation of these goods to non-EU countries has also been prohibited for insurance and reinsurance purposes. The ban on insurance and reinsurance services for petroleum products will come into effect on December 5, 2022, although the transportation of these goods will still be allowed. Moreover, before December 5, 2022, requests for the transport of Russian crude oil and before February 5, 2023, requests for the transport of petroleum products must be paid if the insurance contract was signed before June 4, 2022, and the contract has expired. As a result, insurance companies and reinsurers will be allowed to provide coverage for shipments sold at or below the price cap, but it will be prohibited to provide coverage for shipments sold above the price cap. As already in effect, the transportation of Russian crude oil and derivatives to the EU will be prohibited starting December 5, 2022, and February 5, 2023. However, EU vessels will be allowed to carry shipments from Russia to third countries, but EU insurers will not be allowed to provide coverage for these shipments.