USA Trends and Developments Contributed by: Seward & Kissel LLP, Seward & Kissel LLP
porate formation, and management consulting services. The United States has also prohibited a variety of specified services related to the maritime transport of Russian Federation-origin crude oil and petroleum products, including trading/ commodities brokering, financing, shipping, insurance (including reinsurance, and protec - tion and indemnity coverage), flagging and cus - toms brokering. These prohibitions took effect for crude oil transport in December 2022 and for other petroleum products in February 2023. An exception exists that permits such services when the price of the seaborne Russian oil does not exceed the relevant price cap; however, imple - mentation of this price exception requires market participants to be mindful of the accompanying record-keeping and attestation process outlined in the guidance published by the Department of the Treasury’s Office of Foreign Assets Con - trol (OFAC) that allows each party in the supply chain of seaborne Russian oil to demonstrate or confirm that oil has been purchased at or below the price cap. In addition, certain record-keeping requirements and applicable limitations periods have been extended from five to ten years. As a consequence, the oil tanker trade appears to have become more bifurcated with the rise of “dark” or “shadow fleet” tankers seeking to avoid application of US (or G7) jurisdiction. Ser - vice providers that remain out of compliance may be in the crosshairs as the regulatory focus shifts to enforcement of the sanctions policies previously announced by the West. Published guidance from the OFAC, released throughout 2024, reflects intense domestic co- ordination and robust civil and criminal enforce - ment efforts across government. Looking ahead for 2025, the authors expect ongoing and, in
some instances, enhanced enforcement of exist - ing sanctions regimes – and enhanced cross- border co-ordination is being seen between the principal regulators in the USA, UK and EU. There is also an emerging focus on broad - er national security regulation involving more robust inbound and outbound investment secu - rity programmes. Recent highlights include the following. Secondary sanctions against Russia’s military-industrial base In June 2024, the OFAC notified the market that the USA considers that “foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by [the] OFAC”, and that the OFAC defines “Russia’s military-industrial base” to include all persons sanctioned under the OFAC’s Russian sanctions regime. New energy sectoral sanctions On 10 January 2025 and 15 January 2025, the OFAC announced sweeping sanctions targeting Russia’s oil production and exports, military- industrial base, and other entities identified as sanctions-evaders, together with a new sectoral sanctions determination, authorising sanctions against any persons who operate or have oper - ated in the energy sector of the Russian Federa - tion economy. Inbound and outbound investment regulation The USA has been increasing scrutiny of inbound foreign investment for national security risks, and has published a final rule establishing an outbound investment security programme, effective 2 January 2025. The final rule imposes new diligence requirements on US persons that make outbound investment transactions with a
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