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UK Sanctions on Russian Tanker Firm Show Effort to Curb Evasion

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December 7, 2023

(Bloomberg) —

UK sanctions against a Dubai-based company that controls Russia’s state-controlled oil tanker fleet are the latest sign that Western authorities are starting to react to Moscow’s effort to work around the curbs.

A firm called Oil Tankers SCF Mgmt FZCO was among dozens of entities and individuals added to the UK’s sanctions list Wednesday, in what the British government described as an effort to cut funding to “Putin’s war machine.” 

The firm has a fleet of 62 ships spanning oil and fuel transportation, according to the Equasis international maritime database. The vast majority are beneficially owned by state tanker company Sovcomflot PJSC, according to a separate industry database.

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The UK first sanctioned Sovcomflot’s Russian entity last year. Many of its ships are now managed from Dubai.

SCF’s press service declined to comment.

The latest move is the biggest yet by the UK to target ships helping to carry Russian oil that are operating outside western jurisdictions since sanctions were imposed on the nation’s exports.

The UK and US have in recent weeks shown signs of ramping up enforcement actions targeting Russia’s oil sector. The two nations, along with Group of Seven allies and the European Union, have been trying to implement a price cap on the sale of Russian crude and fuel to limit Moscow’s revenue. 

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So far the Kremlin has largely managed to circumvent that policy, punching an $11 billion hole in western sanctions. But in recent weeks there have been a steady stream of sanctions on Russian companies, marking a new stage in the enforcement of the rules.

In addition to Sovcomflot, three other tanker businesses were also targeted., K&O Ship Management, Radiating World Shipping Services and Star Voyages Shipping Services. 

The UK said the SCF entity and three other companies used “opaque corporate structures and deceptive shipping practices to facilitate unfettered trade in Russian oil”.

© 2023 Bloomberg L.P.

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