A merican Club Circular No . 05/24 1 FEBRUARY 2, 2024 CIRCULAR NO. 05/24 TO MEMBERS OF THE ASSOCIATION Dear Member: RUSSIAN SANCTIONS UPDATE: KEY DEVELOPMENTS IN THE SANCTIONS IMPOSED AGAINST RUSSIA BY THE UK, EU AND US The Price Cap Members should refer to Circular No. 03/23 of February 14, 2023 for details of the Price Cap scheme which regulates the transport and insurance of Russian CN 2709 and CN 2710 cargoes. Retention and sharing of attestations have been a feature of compliance with the Price Cap scheme since it was introduced. Changes to this attestation model have now been announced. The Price Cap Coalition (G7, Australia and the EU) has published a statement of updates to the Price Cap rules: Coalition-Statement-on-Price-Cap-Rule-Updates.pdf (treasury.gov) . The changes are designed to support the implementation of the Price Cap and disrupt circumvention by reducing opportunities for bad actors to use opaque shipping costs to disguise oil purchased above the cap. These changes will come into effect on February 19, 2024 (UK and US) and for cargoes loaded on or after February 20, 2024 (EU). The two key changes are: • A requirement for attestations to be provided on a per-voyage basis. Annual attestations will no longer be acceptable. Where the cargo is transferred to another vessel via STS, this will constitute a new voyage requiring further attestations. The per voyage attestations should be provided as follows: o The attestations received by shipowners from charterers or other contractual counterparts should be obtained prior to loading. This is emphasized in the US guidance. Unless the attestation is received before loading, the shipowner will not have comfort that the cargo is price cap compliant until it is already on board. The EU guidance reiterates that “Shipowners are required to do the necessary due diligence such that it would be reasonable to rely on the attestation they have been provided by their customer.” A merican Club Circular No. 05/24 2 o The attestations provided by shipowners to P&I clubs must be provided within 30 days of loading. No cover will be available unless an attestation is provided within this timescale. • Itemized price information for ancillary costs are to be recorded by those entities with access to price information and then provided to shipowners and P&I Clubs upon request. Shipowners must ensure they have a right to receive such ancillary costs information from their counterparts upon request (US) or within 30 days of the request (UK and EU). Accordingly, Members should include in their contracts appropriate provisions to enable them to exercise such rights. If Members fail to do so, this may affect their ability to discharge their own information obligations to their Club, and potentially jeopardize their P&I cover. P&I clubs are to ensure that shipowners obtain and share this information with them on request. The EU Regulation 833/2014 has been amended to provide that service providers should have the right, upon request, to itemized price information. Members should therefore consider ensuring a right to such information within a much shorter timescale than 30 days, so as to be able to share the information promptly with P&I Clubs and other service providers. The itemized ancillary costs to be recorded and shared as set out in the UK and EU guidance should include the following: “For cost, insurance, and freight (CIF) contracts, the following should be covered: • Costs: export licences,