USA Law and Practice Contributed by: Seward & Kissel LLP, Seward & Kissel LLP
are required to be blocked (ie, asset-freezing). Notably, the USA has also enacted secondary sanctions that have an extraterritorial effect, authorising broad penalties against foreign per - sons who engage in certain activities, including transactions with certain designated individuals, entities and governments. US economic and trade sanctions are primarily administered and enforced by the US Depart - ment of the Treasury’s Office of Foreign Assets Control (OFAC). The US Department of State implements certain sanctions programmes, including the International Traffic in Arms Regu - lations, while the US Department of Commerce administers and enforces the USA’s export con - trol laws. The US Department of Justice has jurisdiction to enforce criminal violations of US sanctions laws, while the OFAC has jurisdiction to enforce civil violations. The OFAC and the DOJ regularly bring enforcement actions for violations of US sanctions laws, which can include monetary penalties and prison sentences (for criminal vio - lations). Additionally, the OFAC, along with other US government agencies, has encouraged the private sector to adopt and implement sanctions compliance programmes. Since the onset of the Russia-Ukraine war in February 2022, the USA has implemented a wide range of sanctions and export controls against the Russian Federation and its supporters. In the shipping industry, this has included prohi - bitions on the importation of certain Russian energy products into the USA (such as crude oil, petroleum, petroleum fuels, oils, liquefied natural gas and coal), as well as prohibitions on all new investments in Russia by US persons, among other restrictions.
Moreover, following the G7’s policy agreement to implement a cap on the price of Russian oil and petroleum products in September 2022, the OFAC has implemented that policy by prohibit - ing US persons from engaging in a variety of specified services related to the maritime trans - port of Russian Federation-origin crude oil and • financing; • shipping; • insurance (such as reinsurance, protection and indemnity); • flagging; and • customs brokering. petroleum products, including: • trading/commodities brokering; These prohibitions took effect on 5 December 2022 with respect to the maritime transport of crude oil, and on 5 February 2023 with respect to the maritime transport of other petroleum prod - ucts. The OFAC has published detailed guidance for compliance with the policy, including a safe harbour for service providers acting in compli - ance with the price cap, which requires atten - tion to a record-keeping and attestation process to avoid strict liability for breach of sanctions. There has subsequently been significant tighten - ing and increased enforcement of the price cap policy by the OFAC and its partners. The OFAC issues general and specific licences that provide an administrative mechanism for a party to request authorisation to engage in a transaction that would otherwise be prohibited by sanctions. A general licence authorises a par - ticular type of transaction for a class of persons without the need to apply for a licence. A specific licence is a written document issued by the OFAC to a particular person or entity, authorising a par - ticular transaction in response to a written licence
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