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Standard Club: More sanctions are issued against Russia by the EU, UK, and US

Economic sanctions targeting Russia continue to evolve and escalate with many being coordinated among the EU, UK, US, and their allies, says the P&I club.

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The Standard Club on Tuesday (1 March) published an update for the maritime sector regarding recent sanctions on Russia:

The economic sanctions targeting Russia continue to evolve and escalate with many being coordinated among the EU, UK, US, and their allies including sanctions against President Putin and the Central Bank of Russia. Members are encouraged to monitor developments in real time. Below is a summary of some of the recent actions.

EU

On 25 February the EU decided to freeze the assets of President Putin and the Russian Minister of Foreign Affairs, Sergey Lavrov. In addition, the EU imposed restrictive measures on the members of the National Security Council of the Russian Federation and on the remaining members of the Russian State Parliament who supported Russia’s recognition of the two Ukrainian territories of Donetsk and Luhansk as self-proclaimed republics.

The EU Council also agreed a further package of restrictive measures to respond to the military aggression carried out by the Russian Federation against Ukraine. It expands the existing financial sanctions with the aim of cutting Russian access to EU capital markets. These sanctions target 70% of the Russian banking market and key state-owned companies.

This sanctions package came into effect on 26 February 2022 and is set out in Council Regulation (EU) 2022/328 amending Regulation (EU) No. 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.

Export bans

The major trade provisions of the Regulation are set out below, which include a prohibition on the sale, supply, transfer or export of:

  1. dual-use goods and technology, to Russia or for use in Russia. These new sanctions remove the requirement that the dual-use goods must be for military use or for military end-users and instead imposes a blanket ban on the supply of dual-use items to any Russian person or for use in Russia. For the purposes of this Regulation, “dual-use goods and technology” means the items listed in Annex I to EU Regulation 2021/821, which is available by clicking here.
  2. specific goods and technology, listed in the Regulation, which might contribute to Russia’s military and technological enhancement, to Russia or for use in Russia.
  3. specific goods and technology, listed in the Regulation, suited for use in oil refining, to Russia or for use in Russia.
  4. specific goods and technology, listed in the Regulation, suited for use in aviation or space industry, to Russia or for use in Russia.

For each of the aforementioned prohibitions on exports of goods and technology, there is a corresponding prohibition on the provision of technical assistance, financing or financial assistance or brokering services related to the goods and technology.  Financial assistance is defined to include insurance and reinsurance.

These prohibitions apply irrespective of whether the goods or technology originate in the EU or not.

The Regulation sets out specific grounds on which the exporters can apply to the competent authority of the EU member state for a partial or temporary exemption from the prohibitions in respect of contracts executed into prior to 26 February 2022. These grounds include humanitarian, medical applications, maritime safety software updates and personal use (generally covering personal effects and tools of trade not intended for sale).

Financial restrictions

Restrictions have been imposed on financial transactions between the EU and Russia in an effort to impede access by certain Russian entities to capital markets and the Russian Government’s ability to finance its military operations.  These build upon existing restrictions that have been in place since 2014.

It is prohibited to deal with “transferable securities and money-market instruments” issued after 12 April 2022 in respect of the following Russian banks: Alfa Bank, Bank Otkritie, Bank Rossiya and Promsvyazbank and eight Russian state-owned companies: Almaz-Antey, Kamaz, Novorossiysk Commercial Sea Port, Rostec, Russian Railways, JSC PO Sevmash, Sovcomflot, and United Shipbuilding Corporation.

In addition, EU trading venues will be prohibited from listing or providing services in relation to shares of Russian state-owned entities on EU trading venues.

It also prohibits the acceptance of any deposits from Russian nationals or entities established in Russia, if the total value of deposits exceeds €100,000 (this is not applicable to EU nationals).Further details can be found here.

Visa restrictions

The EU has suspended its visa facilitation process allowing for privileged access to the EU for Russian diplomats, other officials and businesspeople (see Council Decision (EU) 2022/333 available by clicking here.)

UK

On 25 February 2022, the UK designated Russia’s President Putin and Minister of Foreign Affairs Sergey Lavrov to the sanctions list. Their UK-based assets were frozen immediately, and UK companies will be barred from providing goods, services, or assets to them.

US

Like the EU, the US announced significant new controls on the export, reexport, or transfer (in-country) to Russia of items subject to the US Export Administration Regulations (EAR). According to US authorities, the revised controls are intended to primarily target the Russian defence, aerospace, and maritime sectors. The controls took effect on 24 February 2022. These rules are complex and require careful review for any transaction involving items subject to the revised EAR rules. Further details can be found at the US Department of Commerce website here.

The US also designated President Putin and Minister Lavrov to the SDN list. The designations were made pursuant to EO 14024 and announced on 25 February 2022. Their US-based assets are thus blocked, and US persons are prohibited from engaging in any transaction involving them. Non-US persons also face a risk of sanctions if they provide ‘material assistance’ to or on behalf of the blocked individuals as set forth in EO 14024.

Further developments – as at 28 February

  • On 26 February, the EU, UK, US, and Canada agreed to block certain Russian banks from access to the SWIFT payments system, although the banks have not yet been identified. Japan joined the agreement the next day.
  • On 27 February the EU announced that it is closing its airspace to Russian aircraft and banning Russian state media outlets. Russian planes have also been banned from UK airspace. Russia has retaliated by closing its airspace to flights from several EU countries. The US has not (yet) banned Russian planes from its airspace.
  • The EU has also announced that it will introduce restrictive measures targeting key sectors of the Belarus economy, e.g. the export of mineral fuels, tobacco, wood, timber, cement, iron and steel as a result of its support for Russia’s hostilities against Ukraine.
  • The EU and the UK have announced that they will freeze the assets of the Central Bank of the Russian Federation. The UK will take immediate steps to bring into effect restrictions to prohibit any UK person from undertaking financial transactions involving the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation.
  • The US implemented such a freeze on 28 February with the issuance of Directive 4 under EO 14024. Directive 4 prohibits US persons from engaging in any transaction involving the Central Bank of Russia, the National Wealth Fund of Russia, or the Russian Ministry of Finance, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. These Russian entities are not designated to the SDN list. They are designated to the Non-SDN Menu-Based Sanctions (NS-MBS) List maintained by the Office of Foreign Assets Control. Nevertheless, US persons including US banks and their foreign branches are prohibited from engaging in the identified transactions involving these Russian entities.
  • Concurrently with issuance of Directive 4, the US updated Russia-related GL 8 pertaining to energy-related transactions. The revised general license (GL 8A) extends the authorization for transactions related to energy to the Central Bank of Russia. This is in addition to the five Russian banks identified in the original GL 8. A copy of GL 8A is available here.
  • On 28 February 2022, UK Transport Secretary told all UK ports to deny access to ‘any Russian flagged, registered, owned, controlled, chartered or operated vessels.’ The announcement is brand new. Its impacts are being considered by the club.

The club continues to closely monitor the situation and will update members about further developments. If you have any queries, please contact your usual club contact.

Key contacts

Jamie Wallace
Legal Director
+44 20 3320 8968
+44 7554 332 533
[email protected]

Ursula O’Donnell
Divisional Claims Director
+44 20 3320 8813
+44 7824 590 271
[email protected]

Gina Venezia
General Counsel
+1 929 577 9478
[email protected]

 

Photo credit: Ehimetalor Akhere Unuabona on Unsplash
Source: Standard Club
Published: 2 March, 2022

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Legal

Helmsman on Inter-Pacific Petroleum legal battle: When ignorance meets fraud

Lester Ho, Associate Director of law firm Helmsman shared his timely key takeaways on the recent case of Goh Jin Hian against defunct Singapore bunker supplier Inter-Pacific Petroleum.

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Lester Ho Helmsman

Lester Ho, Associate Director of multi-disciplinary law firm Helmsman LLC shared his timely key takeaways on the recent case of Goh Jin Hian v Inter-Pacific Petroleum when the Appellate Division of the High Court in Singapore overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses:

The collapse of a company often prompts a search for blame, especially where the downfall stems from deliberate misconduct such as fraud that appears avoidable in hindsight. Unsurprisingly, a company’s directors are frequently perceived as the root of the problem and become prime suspects in the inevitable witch hunt for accountability. The recent case of Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd (in liquidation) [2025] SGHC(A) 7 is a timely reminder of a director’s duties as well as the legal risks in the event of breach.

The downfall of Inter-Pacific Petroleum Pte Ltd (“IPP”) is well-documented. The Maritime Port Authority of Singapore suspended IPP’s bunker craft operator licence after discovering that the mass flow meter of a bunker tanker chartered by IPP had been tampered with. Concerns raised by IPP’s banks in relation to its business led its non-executive director, Mr Goh Jin Hian, to discover that it was heavily indebted to the banks. It was also discovered that the facilities had been used on sham sale and purchase transactions.

IPP was subsequently placed in compulsory liquidation, and Mr Goh was sued for breach of his director’s duties. It was alleged that the sham transactions could have been prevented had Mr Goh discharged his duties and that he was therefore responsible for IPP’s losses. At first instance, the High Court found that Mr Goh had breached his duty of care and ordered him to compensate IPP for approximately US$146 million in losses (Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178). Among other things, the High Court found that Mr Goh was in breach because he was entirely ignorant of IPP’s cargo trading business.

The Appellate Division of the High Court upheld the finding that Mr Goh had breached his duty for having been unaware of IPP’s cargo trading business. However, it overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses. The Appellate Division found that IPP failed to prove that Mr Goh would have uncovered the sham transactions even if he had discharged his duty. Accordingly, Mr Goh was absolved of his liability to compensate IPP.

There are two broad takeaways from the decision.

The first takeaway is that every director, both executive and non-executive, is held to a minimum standard of care. This standard requires directors to take reasonable steps to put themselves in a position where they can guide and monitor the management of the company. Put simply, ignorance of a company’s business is no defence, even for non-executive directors that are not involved in everyday operations. Accordingly, although Mr Goh was a non-executive director, the fact that he was unaware that IPP was carrying on the business of cargo trading meant that he was in breach of his duties.

It may be surprising that a director could be entirely unaware of an important part of a company’s business. But the reality is that modern day companies have become commercial behemoths with complex and layered operations that makes it all too easy for directors (especially non-executive directors) to delegate oversight over critical business decisions and lose visibility of what their companies do. It is therefore important for directors, regardless of their formal titles, to ensure that there is a robust chain of reporting and command such that they have sufficient knowledge of the company’s operations to discharge their duties.

The second is that, while the law imposes high standards on directors, it does not demand unrealistic standards. As noted, the Appellate Division accepted that Mr Goh had breached his duties for having been unaware of IPP’s cargo trading business. However, it was not persuaded that, even if Mr Goh had discharged his duties and had been properly informed of IPP’s activities, the sham transactions could have been prevented. IPP was affected by what the Appellate Division considered a “deep-seated fraud” that had gone undetected even by IPP’s auditors. In the circumstances, it was far from clear that Mr Goh could have prevented the loss even if he had discharged his duty.

However, just because the law does not expect directors to be superhuman does mean that directors can afford to be complacent. Directors would still do well to take reasonable and diligent steps to ensure that they have a good grasp of the company’s operations and engage competent professionals (e.g., auditors) to help surface risks that they may otherwise miss. In a sense, Mr Goh avoided liability not because his breach was minor, but because the extent of the fraud perpetrated meant that the gravity of his breach cannot be said to have caused the loss. In other words, a less sophisticated or extensive fraud might have yielded a drastically different outcome – directors should take heed.

A timeline organised list of events preceding the current development of Inter-Pacific Petroleum has been recorded by Manifold Times below:

Related: Singapore: Ex-Director of Inter-Pacific Petroleum wins appeal against former company

Related: Singapore: Ex-Director of Inter-Pacific Petroleum appeals High Court decision
Related: Singapore: Former auditors of Inter-Pacific Petroleum undergo private oral examination at court
Related: Singapore: Civil trial between Inter-Pacific Petroleum and Dr Goh Jin Hian begins
Related: Former Singapore Director of Inter-Pacific Petroleum sued for USD 156 million
Related: Inter-Pacific Petroleum creditors authorised to fund lawsuit against former Director
Related: New Silkroutes under investigation over possible breach of Securities and Futures Act
Related: Judicial Managers considering to take former Singapore Director of Inter-Pacific Petroleum to court
Related: Singapore: Inter-Pacific Group receives winding up order from High Court
Related: Singapore: Inter-Pacific Group files for winding up application at High Court
Related: MPA revokes Inter-Pacific Petroleum Pte Ltd bunker supplier licence
Related: Co-heads of Trade and Commodities Finance for Asia-Pacific leave SocGen
Related: Inter-Pacific Group, Inter-Pacific Petroleum to hold creditors’ meet
Related: NewOcean detains Singapore-flagged bunker tanker “Pacific Energy 28”
Related: SocGen lawsuit against NewOcean Petroleum dropped, party to counterclaim
Related: MPA revokes Inter-Pacific Petroleum bunker craft operator licence
Related: Magnets on MFMs: Trial starts for former bunker clerk of “Consort Justice
Related: First suspect charged over MFM tampering in landmark case
Related: With nearly $180 million of debt, IPP proposes interim judicial management
Related: Inter-Pacific Group, Inter-Pacific Petroleum under judicial management
Related: Magnets on MFMs: “Consort Justice” crew pleads ‘not guilty’ to tampering charge
Related: IPP responds to temporary suspension of bunker craft operator licence
Related: MPA temporarily suspends IPP bunker craft operator licence
Related: Singapore: Bunker Cargo officer, crew face charges over alleged MFM tampering

 

Photo credit: Helmsman
Published: 13 June, 2025

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Alternative Fuels

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

CSSC’s SDARI obtained Approval in Principle (AiP) certificates from classification societies ABS, RINA and LR for four vessel designs including a 50,000 cubic metre ammonia bunkering vessel.

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China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

China State Shipbuilding Corporation’s (CSSC) Shanghai Merchant Ship Design and Research Institute (SDARI) recently obtained Approval in Principle (AiP) certificates from several classification societies for four vessel designs. 

Among the four is a 50,000 cubic metre (m3) ammonia bunkering vessel, which received AiP certificate from American Bureau of Shipping (ABS). 

It integrates liquid ammonia transportation and bunkering functions and can meet the long-distance transportation needs of liquefied gas goods such as liquefied petroleum gas (LPG) and liquid ammonia. 

The ship is equipped with three IMO Type A independent liquid cargo tanks, and uses zero-carbon ammonia fuel to drive the main engine and generator, meeting the IMO greenhouse gas emission reduction strategy and actively responding to the latest greenhouse gas intensity (GFI) requirements of the 83rd meeting of the IMO Marine Environment Protection Committee (MEPC 83). 

The entire ship is equipped with two independent 1,000 m3 deck liquid ammonia storage tanks, taking into account the ammonia fuel endurance requirements under multi-cargo loading and unloading, significantly improving operational economy and flexibility. 

In response to the needs of bunkering operations, it is specially equipped with a retractable bow thruster, side thruster and adjustable propellers to meet ABS’ DPS-1 notation and adapt to the complex port environment of bunkering operations. 

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

Meanwhile, a dual-fuel LNG/hydrogen-powered Ultramax bulker design and a 30,000 GT Roll-On/Roll-Off Passenger (ROPAX) ship designed to sail in the Mediterranean Sea received AiP certificates from RINA. 

SDARI also received AiP from Lloyd’s Register (LR) for a 113,000 dwt ammonia dual-fuel liquid cargo ship. The optimised propulsion system, specially configured with an ammonia dual-fuel power system and a wind-assisted propulsion system, is expected to save more than 10% energy, especially at low speeds. 

 

Photo credit: Shanghai Merchant Ship Design and Research Institute
Published: 12 June, 2025

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Alternative Fuels

GCMD-BCG survey: 77% of shipowners, operators view net zero as high strategic priority

Survey also found the use of bio-blended bunker fuels has more than doubled to 46% and methanol use has increased from 3% to 6% but uptake of more nascent technologies such as ammonia remains limited.

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GCMD-BCG survey: 77% of shipowners, operators view net zero as high strategic priority

The Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (11 June) said a survey found 77% of shipowners and operators now consider achieving net zero a high priority in their strategy, up from 73% two years ago.

This was among the findings of the second edition of the Global Maritime Decarbonisation Survey, jointly conducted by GCMD and Boston Consulting Group (BCG) between October 2024 and February 2025.

The survey gathered 114 responses from shipowners and operators across a range of vessel types, fleet sizes, and regions. While the survey was conducted before the International Maritime Organization’s (IMO) MEPC 83 session in April, its findings already reflected sustained commitment across the industry. The outcomes of MEPC 83—introducing new regulatory targets and incentives—are expected to reinforce these ambitions and further accelerate momentum.

Survey results show that 60% of respondents have now set net-zero targets (up from 54%), while the use of bio-blended fuels has more than doubled to 46%, and methanol use has increased from 3% to 6%. However, uptake of more nascent technologies—such as ammonia, wind-assisted propulsion systems, solar panels, super-light ships, and air lubrication—remains limited.

The survey also reflects the industry’s desire for policies and regulations to create a level playing field. Nearly three-quarters of respondents identified either compliance measures or financial incentives as the most important policy objectives. A level playing field will ensure that early adopters are not competitively disadvantaged on cost and stakeholders with limited resources can benefit from financial support to overcome economic barriers.

The survey also gathered insights from key bunkering ports, whose support is critical for maritime decarbonisation. Most surveyed ports have roadmaps and dedicated teams focused on initiatives to facilitate maritime decarbonisation, and all of them, namely Port of Antwerp-Bruges, Port of Long Beach, Port of New York and New Jersey, Port of Rotterdam, and Port of Singapore, offer green incentives. 

A significant concern for ports, however, is the lack of demand certainty from shipping companies for both low-carbon fuels and Onboard Carbon Capture Systems (OCCS). This ‘chicken-and-egg’ dilemma hinders ports to take on the investment decision to develop the requisite infrastructure, though the recently introduced GHG pricing mechanism is expected to strengthen demand signals for low-carbon fuels.

Dr Sanjay C Kuttan, Chief Strategy Officer of GCMD, said, “Positive developments in maritime policy, especially from the IMO, which further tighten limits on GHG emissions, along with the increased ambitions voiced by survey respondents, are encouraging signals. Greater cooperation with the ports and pertinent stakeholders across the various value chains will be required to address challenges across the broader ecosystem. With the right investments and collaborative actions, the maritime industry can chart a course to a future where sustainable decarbonisation and commercial success can co-exist.

Anand Veeraraghavan, Managing Director and Senior Partner of BCG, said, “It is encouraging to see that even in the face of global uncertainties, the maritime industry’s decarbonisation ambitions remain intact and steadfast. The recent MEPC outcomes mark a pivotal step forward, sharpening demand signals with incentives for exceeding compliance goals and penalty mechanisms for shortfalls. Now is the time for the industry—both ships and ports—to build on this momentum.

Note: The second edition of the GCMD–BCG Global Maritime Decarbonisation Survey report can be viewed here

 

Photo credit: Lukas Blazek on Unsplash
Published: 12 June, 2025

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