THE SOVFRACHT INDICTMENT IN THE US AND OIL AND JET FUEL SHIPMENTS TO SYRIA

A case study from Project Alpha at King’s College London on 26th July involves the analysis of information, including of an indictment in the US which details alleged involvement of 2 Russian-flagged petroleum tankers, the MUKHALATKA and YAZ in jet fuel transfer to Syria.  According to the indictment, after its designation by OFAC in September 2016, Sovfracht used another company as a front to wire US Dollars. Sovfracht and the front company allegedly worked with a Cyprus-based oil company (Petrolina), a Denmark-based bunkering company (Dan Bunkering) and a Canada-based oil company to supply jet fuel to Russian tankers bound to Syria and in some instances to enable associated US Dollar transfers for shipments.  The case study also briefly examines the recent case of the interdiction of the Iranian-flagged GRACE 1 in Gibraltar en route to Syria.  It is said that the case study shows that despite US and EU sanctions, Iran and Russia have been transferring oil and refined petroleum products to Syria.  Some western companies and western-flagged vessels were wittingly or unwittingly involved in oil and jet fuel transfer to Syria.  In late June and early July 2019 alone, it says that there were 5 potential instances of oil/refined petroleum transfers to Syria.  This case study was an opportunity to examine how effective unilateral maritime sanctions can be, absent a UN security Council Resolution, it is said that it is clear from the examination in this case study that the unilateral sanctions have had a limited effect for a number of reasons – including the refusal of Russia and Iran to recognise the legitimacy of the measures, and that the principles of innocent passage, transit passage, and freedom of navigation mean that the ability of the US and EU to block (or detain) vessels has been limited.

https://www.kcl.ac.uk/alpha/assets/pdfs/sovfracht-indictment-and-oil-jet-fuel-transfer-to-syria-26-july-2019.pdf

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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