Jeremy Paner Discusses OFAC’s Temporary Lift of Sanctions on Certain Russian Oil Shipments

Jeremy Paner spoke to Compliance Week about the implications of the U.S. Treasury Department issuing a new general license allowing certain transactions tied to Russian oil.

On March 12, the Office of Foreign Assets Control (OFAC) released Russia-related General License 133, authorizing limited transactions involving Russian-origin crude oil and petroleum products loaded onto vessels on or before March 5. The authorization applies only when the cargo is delivered to an Indian port, and then purchased by an entity organized under Indian law, and it expires on April 4.

With oil prices recently spiking due to the war in the Middle East, Paner noted that the authorization is unlikely to materially affect global supply because it applies only to oil already loaded onto vessels.

Instead, Paner said that the measure appears aimed at signaling to oil futures markets that the U.S. could issue additional OFAC licenses in the future to allow more Russian oil to reach global markets. However, Paner cautioned that companies should exercise care if they want to take advantage of this license in the short time window.

“Compliance teams should approach any transactions purportedly authorized by the general license with extreme caution,” Paner said. “They should pay particularly close attention to any shipping or trade documents referring to the Shipped on Board date, as the current temporal limitation can be verified using open source compliance platforms.”

“Importantly, the relevant statute of limitations is 10 years, and I am confident the next Democratic administration will carefully review Russian oil sales and related transactions,” he added.

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