EU proposes to ban access to ports for vessels that circumvent sanctions

The European Union has proposed to deny access to its ports to ships that try to circumvent sanctions on Russian oil, seeking to prohibit the transportation of its crude and oil products below price caps set by the Group of Seven.

The measure is part of a broader package of sanctions against Russia following its invasion of Ukraine, according to EU documents obtained by Bloomberg. With price restrictions on Russian oil and oil products already in place, the focus is now shifting to closing loopholes and enforcing the restrictions more effectively.

The EU executive body noted a "sharp increase in deceptive practices and associated environmental risks" by vessels trying to circumvent the G-7 price cap and the ban on Russian oil imports to the bloc. Vessels suspected or found to be in violation of sanctions by transferring oil from ship to ship should be banned from European ports and locks, the document says.

Ship-to-ship oil transfers have become important in transporting Moscow's oil to the market after the EU banned Russian oil from the country's coal fields. Since December, the main points of transfer of Russian oil have been Ceuta, a Spanish enclave in North Africa, and off the Greek coast near Kalamata.

In early February, the Spanish authorities sent a letter to local shipping services firms reminding them that facilitating such activities could lead to a violation of sanctions. EU companies are prohibited from providing a number of oil transportation services if the cargo on board is purchased at a price not higher than the G-7 price cap of $60 per barrel.

Russia uses a large fleet of old vessels to circumvent the EU and G-7 restrictions. Many of these vessels have been in service for more than 20 years, and their former owners expected to sell them for scrap. Instead, they transferred them to newly established companies that continue to use them.

As part of the planned package of sanctions, the eleventh since February 2022, the EU has also proposed to take measures against ships that disable navigation systems. These measures require the support of all EU member states.