Consolidated FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014 [Version of 4 February 2023]

The European Commission (EC) has published an updated consolidated version of its „FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014“ in the light of the ongoing conflict in Ukraine. The consolidated version includes FAQs concerning EU sanctions „adopted following Russia’s military aggression against Ukraine“.
THE UPDATE INCLUDES THE FOLLOWING CHANGES:
1. Section „ENERGY“, topic 1 „OIL IMPORTS“:
a) Modified Question: (page 213) How should the prohibition in Article 3m(7) and (8) of Regulation (EU) 833/2014 to transfer, transport or sell, as of 5 February 2023, petroleum products obtained from Russian crude imported by pipeline or on the basis of a derogation granted by national competent authorities be implemented?
A: In order to meet the technical requirements of refineries in some Member States which still import crude oil from Russia, and to ensure the security of fuel supply in the region, compliance with this prohibition may be ensured over a one-year period.
2. Section „ENERGY“, topic 5 „OIL PRICE CAP“:
a) New Question: (page 225) How is the price cap set for petroleum products?
A: For petroleum products, Annex XXVIII to Regulation (EU) No 833/2014 provides for two price cap rates depending on the type of petroleum products:
(i) One rate for discount to crude oil products, primarily residual fuel oils, naphthas, and waste oils.
(ii) One rate for premium to crude oil products, which would be mainly gasoline, motorspirits, aviation spirits, motor fuel blend stocks, gasoil and diesel fuel, kerosene and kerosene-type jet fuel, and vacuum gas oil.
b) Modified Question: (page 228) When does the price cap start applying? When does it stop applying?
A: The price cap will apply from the receipt of cargo on a vessel of the Russian-origin crude oil or petroleum products.
c) Modified Question: (page 229) What oil is covered by the price cap? Do these measures apply to non-Russian oil cargo which is mixed with Russian oil?
A: These measures apply to Russian crude oil falling under CN code 2709 00 as of 5 December 2022 and Russian petroleum products falling under CN code 2710 as of 5 February 2023. In both cases, this shall happen only after adoption of the Council Decision establishing the price cap. Oil and petroleum products which originate in a third country and are only being loaded in, departing from or transiting through Russia, provided that both the origin and the owner of those goods are non-Russian, are exempt from the price cap.
d) New Question: (page 230) When are petroleum products no longer considered of Russian origin?
A: Where these products have been substantially transformed in a third country other than Russia (see FAQ 6 and 8), they are no longer considered of Russian origin and the price cap no longer applies.
e) Modified Question: (page 230) Can Russian seaborne crude oil still be transported to third countries until 5 December 2022?
A: Yes. The transport ban for Russian seaborne oil to third countries comes into force on 5 December 2022 for crude oil and 5 February 2023 for petroleum products, unless below the price cap.
f) Modified Question: (page 230) Can maritime related services be provided for the transport of Russian seaborne oil until 5 December 2022?
A: Since 3 June 2022, there is a prohibition to provide technical assistance, brokering services or financing or financial assistance for the transport to third countries of Russian seaborne oil. However, there is a wind-down period for the execution of services contracts until 5 December 2022 (for crude oil) and 5 February 2023 (for petroleum products).
g) Modified Question: (page 230) When does the price cap enter into force?
A: The price cap enters into force as of 5 December 2022 for crude oil and as of 5 February 2023 for petroleum products.
h) Modified Question: (page 231) Russian crude oil is being transported at sea on 5 December 2022. Does it need to comply with the price cap?
A: No. There is a 45-day wind-down period for seaborne Russian oil purchased above the price cap, provided it is loaded onto a vessel at the port of loading prior to 5 December 2022 and unloaded at the final port of destination prior to 19 January 2023.
i) New Question: (page 231) Russian petroleum products are being transported at sea on 5 February 2023. Do they need to comply with the price cap?
A: No. There is a 55-day wind-down period for seaborne Russian petroleum products purchased above the price cap, provided it is loaded onto a vessel at the port of loading prior to 5 February 2023 and unloaded at the final port of destination prior to 1 April 2023.
j) New Question: (page 232) Can a vessel be added to an insurance open cover policy if this contract was concluded before 4 June 2022?
A: Yes. The new attachment of insurance to vessels pursuant to existing fleet policies amounts to the execution of the original insurance policy.
k) New Question: (page 233) Is it prohibited for an EU vessel to bunker Russian petroleum products?
A: The bunkering by an EU vessel of Russian petroleum products in Russia is possible provided this purchase is required to meet the essential needs of the purchaser in Russia (Article 3m paragraph 9).
l) New Question: (page 233) Can a vessel bunker Russian petroleum products in the EU?
A: Russian petroleum products which were imported into the EU before the 5 February 2023 can be sold, purchased and used, including for bunkering purposes. After 5 February 2023, it is prohibited to import Russian petroleum products into the EU
m) Modified Question: (page 234) Is classification included in the maritime related services ban?
A: No. Service providing assurance that a ship complies with legal requirements and standards established by the classification society during design and construction, and maintained during operation, is not included.
n) Modified Question: (page 234) Are flagging and registration services included in the maritime related services ban?
A: Yes. Flagging and registration services are prohibited for a vessel involved in the transportation of Russian oil, except if it adheres to the price cap.
o) Modified Question: (page 234) Is the processing, clearing or sending of payments by intermediary banks included in the maritime related services ban?
A: The approach as clarified by the Commission’s guidance previously applies: in Case C-72/15 (Rosneft), the Court of Justice clarified that the notion of „financial assistance“ in Article 4 does not include the processing of a payment, as such, by a bank or other financial institution.
p) Modified Question: (page 235) Is bunkering of Russian oil included in the maritime related services ban?
A: No. The provision of bunkering services (supplying fuel for use by ships) to vessels transporting Russian crude or petroleum products is not included in the scope of Article 3n nor the price cap.
q) New Question: (page 235) Are vessel or cargo testing, inspection and certification services included?
A: No. Vessel or cargo testing, inspection and certification services, are not included in the scope of the price cap.
r) Modified Question: (page 236) Can a ship transport Russian oil if the contract relating to the transport was signed before the entry into force of the price cap measure?
A: The price cap enters into force on 5 December 2022 for crude oil and on 5 February 2023 for petroleum products. This means that from those dates, EU operators will not be allowed to transport Russian oil if such oil was purchased above the price cap.
s) Modified Question: (page 238) How does the recordkeeping and attestation process work?
A: The price exception will rely on a recordkeeping and attestation process 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. This recordkeeping and attestation process is in addition to standard due diligence.
t) New Question: (page 239) How should operator comply with the attestation process when dealing with petroleum products?
A: The recordkeeping and attestation process is the same as for crude oil. Accordingly, EU operators should collect attestations for petroleum products, in line with FAQ 8 and 21.
u) Modified Question: (page 241) What are the obligations for insurers and protection and indemnity (P&I) clubs?
A: Insurers are Tier 3 actors. Accordingly, they do not regularly have direct access to price information in the ordinary course of business.