Following from the recent geopolitical developments in Ukraine, there has been a heightened interest in international sanctions. Through this series of articles, we aim to provide a general overview of the notion of sanctions, consider the local framework through which sanctions function in Malta, illustrate the general obligations which subject persons are required to observe vis-à-vis sanctions and discuss a general overview of the sanctions imposed by the EU against Russia.
In this seventh article, we shall consider the salient aspects of the guidance provided by the European Commission from these frequently answered questions.
The European Commission has issued a set of Frequently Asked Questions (FAQs) in relation to the sale of tanker vessels. These FAQs provide additional guidance on the measures relating to the sale of tanker vessels as stipulated in Article 3q of Council Regulation (EU) 833/2014. For further information on these restrictive measures, please refer to the following link: Sanctions 6: SMB Guidance on Sanctions on Tanker Vessels.
The FAQs consider a number of points in relation to Article 3q of Council Regulation (EU) No. 833/2014. The FAQs consider the prohibition of the sale of oil tankers to Russia in greater detail as well as the type of tankers which are affected by these restrictive measures. The guidance stipulates that Article 3q is not a straightforward ban on the sale or other transfer of ownership of tankers to Russia but that it introduces transparency into these transactions as a means of avoiding potential evasion of EU import bans on Russian crude oil and petroleum product.
The guidance also considers in greater detail the notion of “other transfer of ownership”, where it is explained that this phrase is to be construed broadly and to consider situations such as sale, barter, relinquishment and inheritance. The FAQs also discuss the applicability of Article 3q of Council Regulation (EU) No. 833/2014, as well as the applicability of the obligation to notify, including clarifying that the applicability of the sale or other transfer of ownership applies to both EU and non-EU flagged vessels.
These FAQs also note that the obligation to notify can be carried out by the EU natural or legal person who/which is subject to the obligation, as well as any person acting in that person’s name, such as a lawyer, registered agent or ship broker.
The FAQs also consider in greater detail the conditions under which a competent authority may authorise the sale or other transfer of ownership of tankers to a Russian person, or the use of that tanker in Russian territory. The European Commission also provides some information as to how sellers may ascertain whether its tankers are not being sold for use in Russia.
The notion of liability is also considered under these FAQs in that the FAQs consider the situation where an EU individual or entity sells or transfers a tanker which is subsequently used in Russia without seeking authorisation. These FAQs note the importance that any EU individual or entity which is selling or transferring ownership of a tanker vessel, as well as operators who are participating in the sale or transfer of ownership (such as, for example shipbrokers and escrow agents) should carry out the necessary due diligence to ensure compliance with all EU sanctions.
These FAQs provide further information and context to the ban, which was imposed back in December 2023, whilst also answering some questions which have been raised since the addition of this particular restrictive measure to the multiple waves of sanctions which have been issued since February 2022.
For further information on these FAQs, and to read the full list of FAQs, reference can be made to the following link: https://finance.ec.europa.eu/publications/tanker-sales_en
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Zachary Galea.