Price cap - Russian-origin petroleum products: attestations required
As of 5 February 2023, the EU / G7 Price Cap on Russian-origin crude oil was extended to Russian-origin petroleum products falling under CN code 2710.
This means that Norwegian Hull Club (“The Club”) may only provide insurance related to the maritime transport of Russian-origin petroleum products to third countries (i.e. non-EU / G7 countries that do not restrict the import of such goods) if these are purchased at or below the applicable Price Cap level.
Two different Price Cap levels have been set for Russian-origin petroleum products falling under CN code 2710. For petroleum products that generally trade at a premium to crude oil, the Price Cap is set at USD 100 per barrel; for petroleum products that generally trade at a discount to crude oil, the Price Cap is set at USD 45 per barrel.
Details of which CN codes fall under each price category can be found in Annex XXVIII of Council (EU) Regulation 833/2014, as amended.
The EU, UK and US have published legislation and guidelines giving effect to the Price Cap measures, which have now been updated to reflect the introduction of the Price Cap on Russian-origin petroleum products. The key points are:
• A wind-down period applies for Russian-origin petroleum products loaded before 5 February 2023, provided that the cargo is discharged before 1 April 2023.
• It is not clear whether Russian-origin bunker fuel (falling under CN code 2710) is subject to the Price Cap. Pending clarification, we recommend that Assureds intending to purchase Russian-origin petroleum products for bunkering purposes seek independent legal advice on the legality of such activity.
Moreover, as advised in The Club’s newsletter of 13 December 2022, the relevant legislation and guidelines adopt a recordkeeping and attestation process that allows each service provider to participate in the maritime transportation of Russian-origin crude oil and petroleum products to third countries if they obtain appropriate evidence that such products were not purchased above the Price Cap.
For Norwegian Hull Club to ensure compliance with the relevant legislation and guidelines – and to provide insurances related to the maritime transportation of Russian-origin crude oil and petroleum products to third countries – Assureds are required to provide The Club with appropriate Attestations as follows:
• Assureds that are engaged in the maritime transportation of Russian-origin crude oil after 5 December 2022 and Russian-origin petroleum products after 5 February 2023, are required to provide The Club with an Attestation in the form set out in Annex I that the purchase price of the cargo does not exceed the relevant Price Cap. Please note that such Attestation must be provided on an annual basis at the start of each policy period.
• Assureds that are engaged in the maritime transportation of Russian origin petroleum products loaded before 5 February 2023 are required to provide The Club with an Attestation in the form set out in Annex II that the product will be unloaded before 1 April
Please download the PDF document on this page, fill out the required fields and send the completed document to your designated underwriter.