(Vardan Papikyan via Unsplash)
According to the BBC, the British Government Treasury is currently conducting 37 investigations into UK-affiliated companies for possibly violating the Russian Oil Sanctions. As of August, there were 52 total investigations, with the investigation into 15 already completed.
There are no fines which have been issued yet for the businesses under investigation. However, the Treasury indicated that they will take action when appropriate. The complexity of the cases has resulted in the extended time required to address them. The first fine of £15,000 for Russia-related penalties was fined last month to a concierge company for having a sanctioned individual on their client list.
“The complexity of the cases has resulted in the extended time required to address them.”
The London-based company Integral Concierge Services was discovered to have made or received 26 payments involving an individual whose assets were frozen under Russian Sanctions. The Treasury is keeping the identities of the businesses under investigation anonymous; however, it is likely to include maritime insurance firms and ship owners, operators, and brokers.
The Office of Financial Sanctions Implementation (OFSI), a unit within the Treasury, conducts investigations into possible violations of the oil price cap and other financial sanctions. In March, OFSI was allocated an additional £50 million to ensure there was better enforcement of UK Sanctions. However, it is difficult to enforce as the companies under investigation can obtain documents easily, which clears them of transporting oil sold above the price cap.
“Certain companies are suspected of bypassing the price cap by keeping the oil price at $60 per barrel or less while inflating their charges for other services.“
The UK and other Western countries have imposed sanctions which include a price cap on Russian crude oil. This facilitates the flow of oil while ensuring Russia cannot profit from it. The cap prevents British businesses from assisting the transport of Russian oil sold for $60 a barrel or more.
Certain companies are suspected of bypassing the price cap by keeping the oil price at $60 per barrel or less while inflating their charges for other services. The UK currently uses a multi-faceted approach regarding the import and transport of Russian oil, with trade sanctions that prohibit the import of all oil and oil products that have been sourced from Russia.
A treasury spokesperson stated that enforcement action would be taken where appropriate as the cap effectively reduces Russia’s oil tax revenues; however, the latest figures on Russia’s economy show that the sanctions have been largely ineffective, with the Russian economy still growing. Additionally, the US remains hesitant to tighten the Western sanctions, fearing that strict enforcement would halt the Russian oil trade and, in turn, drive up global oil prices.
