EU rules to ban 'backdoor' Russian oil

A document published Thursday reveals that the European Union requires fuel importers to prove that their fuels were not made with Russian crude. The document gives guidance on the EU’s forthcoming ban on fuels refined from Russian oil, as part of its 18th package of sanctions against Russia for its war in Ukraine. The ban will take effect on January 21, 2019.

The document is described in detail below:

WHAT IS THE EU ADVISE TO IMPORTERS? Operators are expected to give EU Customs "appropriate proof" of where the crude oil that was used to refine the fuel came from. However, there are some important exceptions.

The EU recommends that importers insert clauses in their contracts with suppliers to guarantee non-Russian crude origin. This will allow them to shift responsibility to the supplier, if later it is established that Russian oil has been used.

Imports of fuel from countries that still buy or blend Russian crude The EU has said that operators must "exercise increased due diligence" when importing fuels from Turkey. India, and China are the three largest importers.

The report also warned buyers to be cautious when importing crude oil from "countries that are known for mixing crudes of different origins".

Imports of crude oil from refineries that run Russian and non Russian crudes in separate production trains must show proof, such as refinery attestations, that the product was produced by the non Russian train.

The buyer from a refinery that processes both Russian and non-Russian oil will need to show proof that there was no Russian crude received or processed within 60 days of the bill of loading date.

The aggregate of imports from refineries that claim to use Russian fuel for domestic fuel needs and non-Russian oil for exports will be prohibited.

EXCLUSION OF PARTNER COUNTRIES & NET CRUDE EXPORTERS

Fuel imports to these countries will not be subject to the ban, as no proof of origin is required.

Imports of fuel from countries who were net crude exporters in the calendar year prior are also exempt, but they may be subject to scrutiny.

The net-exporter designation can be challenged if the country in question imports "significant and excessive" quantities of Russian crude or is suspected to have been used as a hub for Russian crude or fuels derived from Russian crude.

Exclusion of fuels used on ships and flights

The EU made an exception to this rule for ships that bunker marine fuels refined using Russian crude oil, as long as they are for use during the voyage and not for cargo.

It is the same for aircraft that burn jet fuel during a flight between a third-country and an EU member state.

WHAT ABOUT COUNTRIES NOT IN THE EU? The ban is only applicable to third-country importers, including those who enter the EU via EU waters.

(source: Reuters)