Guidance

UK ban on Russian oil and oil products

Updated 14 April 2023

This guidance provides an overview of some of the prohibitions and requirements relating to oil and oil products in the UK’s sanctions legislation and, where appropriate, links to further detailed information. It should be read alongside the legislation, which takes precedence over this guidance.

1. Context for the UK sanctions on Russian oil

Alongside our allies, the UK is imposing sanctions against Russia. As Russia continues its unprovoked attack, we will continue to impose measures to weaken its economic and financial ability to wage war against the people of Ukraine.

Find more on the UK’s full package of sanctions against Russia.

We have aligned our approach with the EU and other partners such as the G7 to maximise the impact of these measures on Russia. An EU ban came into force for Russian crude oil on 5 December 2022, and will do so for Russian petroleum products on 5 February 2023.

This guidance explains the ban for Russian oil and oil products that are intended for entry into the UK. As originally enacted in Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 (S.I. 2022/850), (‘the 14th Russia Sanctions Regulations’), the date that ban was due to take effect was 31 December 2022. However, the government made new regulations, Russia (Sanctions) (EU Exit) (Amendment) (No. 16) Regulations 2022 (‘the 16th Russia Sanctions Regulations’) that:

a. prohibit maritime transport of Russian oil and oil products to third countries
b. prohibit ancillary services for such transport
c. amend the date the existing Oil Ban takes effect to 5 December 2022

The guidance only explains the effect of the 14th Russia Sanctions Regulations. It does not discuss the 16th Russia Sanctions Regulations - there is separate guidance for these.

2. Details of the UK ban on Russian oil and oil products intended for entry into the UK

The UK ban prohibits the import, acquisition, supply and delivery of Russian oil and oil products into the UK and associated ancillary services in respect of these activities. The ‘Principal Regulations’ that give effect to sanctions against Russia are the Russia (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/855) (that incorporate the amendments made by the 14th Russia Sanctions Regulations). The Principal Regulations are referred to in this guidance as the ‘Russia Regulations’. The ban on entry of Russian oil and oil products is set out in particular in Chapter 4I of Part 5. See the Russia Regulations, as amended.

The ban came into effect on 5 December 2022 for England, Wales, Scotland and Northern Ireland. This date aligns with the EU prohibition on the import of seaborne crude oil from Russia, and insurance and financing the transport, particularly through maritime routes, of Russian oil to third countries.

See the EU’s sanctions, contained in Articles 3m and 3n of Council Regulation (EU) No 833/2014 (as amended)

Intended entry of Russian oil and oil products into the UK

The ban prohibits:

• the import of all oil and oil products that originate in Russia
• the import of oil and oil products that are consigned form Russia
• the direct or indirect acquisition of oil and oil products that originate in Russia or are located in Russia, with the intention of bringing those goods to the UK
• the direct or indirect supply or delivery of oil or oil products from a place in Russia to the UK

The ban applies to the entirety of the prohibited activity, including acts that occur outside of the UK.

The ban applies to a wide range of goods, including any oil or oil products within the HS codes below which are produced, manufactured, extracted or processed in Russia.

The ban includes crude oil, refined products, and bioethanol, bitumen and petroleum gases. These products are being defined based on 4-digit Harmonized System (HS) codes to identify the goods in scope. The HS codes in scope are set out under regulation 21 and Schedule 3F of the Russia Regulations and in the table below.

HS Codes in scope for the UK’s import ban on Russian oil and oil products

HS Code	Description
2709	Petroleum oils and oils obtained from bituminous minerals, crude. Includes Clean Condensate
2710	Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils. Includes HSFO, VGO, Kerosene.
ex 2711	Petroleum gases and other gaseous hydrocarbons, excluding HS code 2711 11 (liquefied natural gas), which will be the subject of a separate ban
2712	Petroleum jelly; paraffin wax, microcrystalline petroleum wax, slack wax, ozokerite, lignite wax, peat wax, other mineral waxes, and similar products obtained by synthesis or by other processes, whether or not coloured.
2713	Petroleum coke, petroleum bitumen and other residues of petroleum oils or of oils obtained from bituminous minerals.
2714	Bitumen and asphalt, natural; bituminous or oil-shale and tar sands; asphaltites and asphaltic rocks.
2715	Bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on mineral tar or on mineral tar pitch (for example, bituminous mastics, cut-backs).
2207	Undenatured ethyl alcohol of an alcoholic strength by volume of 80%vol or higher; ethyl alcohol and other spirits, denatured, of any strength
3826	Biodiesel oil and mixtures thereof, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals

Associated ancillary services ban

The Russia Regulations prohibit UK companies from providing, directly or indirectly:

• technical assistance
• financial services
• funds and brokering services

relating to the import, acquisition, and supply and delivery of Russian-origin oil and oil products into the UK.

The definitions of ‘technical assistance’, ‘financial services and funds’ and ‘brokering services’ are set out in regulation 21(1) of the Russia (Sanctions) (EU Exit) Regulations 2019 and sections 60(1) and 61(1) of the Sanctions and Anti-Money-Laundering Act 2018. These definitions are as follows:

Brokering service means any service to secure, or otherwise in relation to, an arrangement, including (but not limited to):

a. the selection or introduction of persons as parties or potential parties to the arrangement
b. the negotiation of the arrangement
c. the facilitation of anything that enables the arrangement to be entered into
d. the provision of any assistance that in any way promotes or facilitates the arrangement

Technical assistance in relation to goods or technology means:

a. technical support relating to the repair, development, production, assembly, testing, use or maintenance of the goods or technology
b. any other technical service relating to the goods or technology

Funds means financial assets and benefits of every kind, including (but not limited to):

a. cash, cheques, claims on money, drafts, money orders and other payment instruments
b. deposits, balances on accounts, debts and debt obligations
c. publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivative products
d. interest, dividends and other income on or value accruing from or generated by assets
e. credit, rights of set-off, guarantees, performance bonds and other financial commitments
f. letters of credit, bills of lading and bills of sale
g. documents providing evidence of an interest in funds or financial resources
h. any other instrument of export financing

Financial services means any service of a financial nature, including (but not limited to):

a. insurance-related services consisting of –

i. direct life assurance
ii. direct insurance other than life assurance
iii. reinsurance and retrocession
iv. insurance intermediation, such as brokerage and agency
v. services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services

b. banking and other financial services consisting of –

i. accepting deposits and other repayable funds
ii. lending (including consumer credit, mortgage credit, factoring and financing of commercial transactions)
iii. financial leasing
iv. payment and money transmission services (including credit, charge and debit cards, travellers’ cheques and bankers’ drafts)
v. providing guarantees or commitments
vi. financial trading (as defined in subsection (2))
vii. participating in issues of any kind of securities (including underwriting and placement as an agent, whether publicly or privately) and providing services related to such issues
viii. money brokering
ix. asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services
x. settlement and clearing services for financial assets (including securities, derivative products and other negotiable instruments)
xi. providing or transferring financial information, and financial data processing or related software (but only by suppliers of other financial services)
xii. providing advisory and other auxiliary financial services in respect of any activity listed in sub-paragraphs (i) to (xi) (including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy)

3. How to determine the origin of oil imports to the UK

For the purposes of the oil import, acquisition and supply and delivery prohibitions, the ‘origin’ of goods is determined in accordance with the Taxation (Cross-border Trade) Act 2018 and UK’s existing non-preferential rules of origin.

See more detailed guidance on the UK’s existing non-preferential rules of origin.

If oil or oil products do not originate in Russia nor are located in Russia, they are not subject to the bans on import, acquisition, supply and delivery. Oil and oil products that originate from another country, and that are located in or consigned from a country other than Russia are therefore not subject to the prohibitions.

Applying those rules, the following oil and oil products would not be categorised as originating in Russia:

Wholly obtained

Oil and oil products are to be regarded as originating from a country or territory if they are wholly obtained in the country or territory. For example, if crude oil was extracted and then refined into diesel in the United States (US), this would be deemed wholly obtained from the US.

Substantial processing

Section 17(3) of the Taxation (Cross-border Trade) Act 2018 states that goods obtained in one or more countries, will have the origin of the last country in which substantial processing has taken place that is economically justified.

Processing is regarded as substantial only if it results in the manufacture of a new product or represents an important stage in manufacture, and it takes places in an undertaking equipped for that purpose.

Processing is not economically justified where a person causes the goods to be processed to obtain a different origin with the purpose of avoiding a prohibition on import.

Russian oil or oil products which have been blended with non-Russian origin oil or oil products in a third country will not automatically be considered substantially processed and must demonstrate that the processing resulted in a new product (this could, for example, be evidence that the HS code for a new product differs from the original) or that the processing represents an important stage of manufacture. In both cases the processing must take place in an undertaking equipped for the purpose. All of these steps must be done for normal commercial purposes, rather than to avoid the UK’s sanctions regime.

For example, if crude oil from the United Arab Emirates is refined in Sweden to produce diesel, these would be deemed to originate in Sweden.

Another example is Russian intermediate feedstocks or products imported into Sweden and then processed to make a new UK-specification finished product would be deemed to originate in Sweden.

Tank heel

When a container (not located in Russia) has previously been used to transport or store Russian oil or oil products, an unpumpable quantity of substance ‘tank heel’ may remain at the base of the container, that is, a substance which could not be removed without causing damage to the container. If non-Russian oil is added to the container, it will mix with the Russian tank heel. The non-Russian products held in the tank can still be imported into the UK.

Co-mingling

Oil or oil products that originate from Russia or that are located in, or consigned from Russia are subject to sanctions as per Chapter 4I of the Russia (Sanctions) (EU Exit) Regulations 2019. These prohibitions also apply to Russian oil co-mingled with oil of another origin, other than in relation to the accompanying guidance on tank heels and pipelines. The prohibitions apply regardless of the importer’s knowledge or suspicions about the origin of the goods, their location or the place from which they were consigned: if restricted goods are imported into the UK then that is a breach of the prohibitions and is open to enforcement action, including seizure of the goods.

Breaching these prohibitions, or seeking to circumvent them, can also be a criminal offence.  Importers must therefore carry out due diligence and take appropriate steps to ensure that non-Russian oil and oil products are not co-mingled with Russian oil before being imported into the UK. This could include, for example, putting in place agreements with the supplier to ensure that oil and oil products are not co-mingled in storage terminals before importing to the UK. Importers should note that regardless of any due diligence or other steps taken, if they are aware that oil and oil products have been co-mingled or they have reasonable cause to suspect that this is the case, importing those goods into the UK can be a criminal offence.

Circumvention

The Russia Regulations also prohibit anyone from intentionally circumventing or seeking to circumvent the UK’s sanctions and make it a criminal offence to do so (see regulation 55). Anything deliberately done to avoid the sanctions, for example blending or processing products solely to prevent them from being of Russian origin, is therefore not allowed. This does not prevent normal processing or blending of products that is being done for purposes other than avoiding sanctions.

See the Russia (Sanctions) (EU Exit) Regulations 2019

To ensure compliance, we encourage you to provide any information regarding circumvention or intention to evade these sanctions to His Majesty’s Revenue and Customs by calling  0800 788 887.

This hotline is open between 8am and 8pm, 7 days a week, 365 days a year.

Oil that originates in a third country and flows through the pipelines in Russia

Oil and oil products of non-Russian origin may unavoidably transit through or depart from Russia. In addition to any other applicable exceptions, the Russia Regulations contain a specific exception for certain oil and oil products that unavoidably transit, are loaded in or depart from Russia – see Regulation 60H. This applies where:

• the goods do not originate in Russia
• the goods are not owned by a person connected with Russia
• the goods are only being loaded in, departing from or transiting through Russia

This means that the ban is not contravened where oil and oil products that originate in a third country, and are not Russian-owned, are only transiting through Russia. Therefore, the prohibitions will not apply where Russia is identified as the country of export in the customs declarations if the country of origin for the oil or oil products is identified in those declarations as a third country, and the goods are not Russian-owned.

For instance, the CPC pipeline transports Kazakh oil through Russia and the Kazakh oil is mixed with Russian oil as a consequence of transportation. The oil cannot be physically segregated once mixed but the portion corresponding to the amount of Kazakh origin oil will be certified as Kazakh origin. Our intention is that this Kazakh-certified oil can be imported as it is of Kazakh origin.

4. How the UK ban on intended entry of Russian oil and oil products will be enforced

All importers of oil and oil products into the UK must be able to provide proof of origin to demonstrate that goods are not of Russian origin to enforcement authorities. Typically, this will be through documentation such as a certificate of origin proving the exact amount of oil originating in a non-Russian third country. In some cases, customs may require further information relating to the goods to be produced. This could include, but is not limited to any invoice, bill of lading or other book or document whatsoever relating to the goods.

We advise all parts of the supply chain for oil imports to the UK to undertake the necessary due diligence to ensure that sanctions are not being circumvented directly or indirectly. Not complying with the sanctions could constitute one of a number of criminal offences.

Importers are also advised to include assurances that imports are not of Russian origin in contractual agreements.

If an importer cannot prove that the oil or oil products being brought into the UK do not originate from Russia, the shipment or relevant portion of the cargo may not be allowed to unload or may be subject to forfeiture.