Guidance

Oil Price Cap (OPC) Advisory: Evasion Linked to Product Origin Manipulation Through Fabricated and Falsified Certificates of Origin (CO)

Published 21 November 2024

Overview 

HM Treasury, through the Office of Financial Sanctions Implementation (OFSI), is the UK’s competent authority responsible for the implementation of the UK’s ban on the maritime transportation of Russian oil and oil products and associated services and the Oil Price Cap (OPC), including civil enforcement of related breaches.  

OFSI has identified instances where shipments of Russian origin oil and oil products have been manipulated to appear as non-Russian through the use of fabricated or falsified certificates of origin (CO). 

This advisory includes an overview of red flags which may indicate this evasion method is occurring and potential mitigation measures which may help UK entities protect themselves against this. For example, relevant competent authorities such as a chamber of commerce should issue COs otherwise they might be fraudulent. This advisory also includes an example of a template CO and checklist of what to look for when assessing the validity of a CO.

This advisory is aimed to assist industry stakeholders including: 

• When they conduct due diligence of their customers (direct or in a chain) that have exposure to Russian oil trade, before signing contracts, for activity during the contract, and in relation to contract renewal. 

• Where particular shipments have displayed suspicious activity and/or sanctions evasion red flags and the validity of a shipment and/or transaction needs to be assessed and verified to ensure that it is price cap compliant. 

• When doing spot checks of particular shipments and transactions to determine whether they are price cap compliant.

Information on suspected breaches of the OPC, including those related to product origin manipulation through fabricated and falsified CO, can be reported to OFSI using the form available at this link.

This advisory does not represent legal advice. If you are unsure of your compliance or reporting obligations under sanctions including for the OPC, you should seek independent legal advice. 

This advisory should be read in conjunction with other related guidance including:  

• OFSI Maritime Services Ban and OPC Industry Guidance: link. 

• OFSI Financial Sanctions Guidance for Maritime Shipping: link. 

• G7+ Coalition OPC Compliance and Enforcement Alert: link. 

• G7+ Coalition Maritime Services Advisory: link.

OFSI will take into account the degree to which UK entities have considered and taken account of relevant guidance, alerts, and advisories when considering the appropriate enforcement action to take for sanctions breaches.

OPC evasion through fabricated and falsified certificates of origin (CO)

Issue 

COs are key shipping documents which state the origin of the oil or oil product. Entities involved in the trade of Russian oil and oil products can use fabricated or falsified CO that claim Russian oil and oil products are of non-Russian origin. 

This can be combined with other behaviours indicating evasion or circumvention of the OPC including, for example, the use of falsified attestations, transaction, and shipping documentation and/or vessel voyage irregularities (see the G7+ Coalition OPC Compliance and Enforcement Alert for more detail on evasion methods, link). This could lead to UK services inadvertently being used to support non-price cap compliant transactions.

Red flags  

Below is an overview of red flags which may help industry stakeholders identify a fabricated or falsified CO. While these red flags may not signify illicit activity in and of themselves, they could be indicative of product origin manipulation, especially when two or more are present, and should trigger increased due diligence:

• The CO lists a country or outer port limits (OPL) of a country that does not normally produce or export oil or oil products, and/or a volume that does not correspond with previous oil production and export metrics for that country. 

• A CO lists a product being non-Russian origin but there is vessel and/or voyage tracking information which shows that the product(s) initially came from Russia and no substantial processing of the oil has taken place off the water in a third country.   

• The CO is for a shipment that displays evidence of voyage irregularities including, for example, AIS manipulation and suspicious ship-to-ship transfers. 

• The CO contains information that is inconsistent with other shipping and transaction information such as attestations, contracts, cargo documents, and vessel and voyage details and history. 

• There are multiple versions of a CO for a given shipment that list inconsistent information on companies involved, product details, and signatures/contact details.  

• Multiple shipments that have the exact same CO details.  

• A relevant competent authority, for example, a national chamber of commerce, has not issued the CO.  

  • For example, in Malta, the authorities have confirmed that only The Malta Chamber of Commerce, Enterprise and Industry (The Malta Chamber) is allowed to authorise COs and that private entities are not allowed to issue such COs. If there is a CO that has sign off by just a private company and not The Malta Chamber, it is fraudulent. 

• A new company with complex or obscure ownership structures has started to issue COs in locations known for ship-to-ship transfers associated with deceptive or sanctions evasive activity. 

• A company that has issued a CO does not respond to requests for further information or fails to provide relevant information to validate the CO and/or confirm that a shipment has occurred as described in the CO.

Mitigations 

Below are some potential mitigation measures which may help UK entities protect themselves against the threat of supporting shipments of Russian oil and oil products that involve fabricated or falsified COs: 

• Verify that the country listed on the CO produces and/or exports the stated oil or oil product. 

• Compare the volume of the product stated on the CO with historical trade and export data to see if it corresponds with previous shipments or seems abnormal. 

• Risk assess COs that appear incomplete, inconsistent, or contradictory to previously shared or publicly available information. Alternative documentation and information sources should be used to corroborate the information presented in a CO. 

• If there are red flags, consider asking to see all copies of a CO for a particular shipment, including those held by different entities in the supply chain. Assess if they are consistent or there are discrepancies.    

• Where an official CO has been issued by a chamber of commerce, industry participants may be able to check the validity of the certificate of origin using the International Chamber of Commerce’s (ICC) online tool (link).  

• Where a ‘self-certified’ CO has been issued, undertake appropriate due diligence of customers and counterparties that issue and provide such COs, including Know Your Customer (KYC) and Know Your Customer’s Customer (KYCC) procedures, the latter of which may be used to identify ultimate beneficial ownership, including any links to Russian entities.  

• If there are concerns with the validity of a CO, contact the relevant national authorities (including maritime and customs) to request their assistance e.g., to verify if the entity listed as issuing the CO is legally allowed to do so and the details within the CO. 

• If there are concerns with the validity of a CO, conduct an audit of other relevant documents for the relevant shipment (e.g. attestations, bills of lading, oil trade contracts) as they might also have been fabricated or falsified to align with the CO. 

• If you determine a CO is fabricated or falsified, conduct an audit of past COs and other relevant documentation provided by this counterparty, since they may have previously deceived a service provider as well. 

• Report any suspicious activities that indicate fabricated CO and OPC evasion to relevant national authorities.

Case study: Assessing the validity of a certificate of origin (CO)

FORM A - GENERALIZED SYSTEM OF PREFERENCES - CERTIFICATE OF ORIGIN (Combined declaration and certificate)

Box: Assessing the validity of a CO

CO item	Things to look out for when assessing validity of a CO
1 - Exporter details	Do KYC and KYCC and other due diligence checks raise any concerns with the stated entity?  Do all copies of the CO for a particular shipment (including those held by different entities) have the same information or are there discrepancies?
2 - Consignee details	Do KYC and KYCC and other due diligence checks raise any concerns with the stated entity?  Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
3 - Means of transport and route	Does this align with information in other documents for this shipment?  Does this align with information from separate vessel and voyage sources?
4 - For official use
5 - Item number	Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
6 - Number of packages
7 - Description of goods	Does this align with information in other documents for this shipment?   Does the country listed in the CO produce and/or export the listed product?  Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
8 - Origin criterion	Does this align with information in other documents for this shipment?  Does this align with information from separate vessel and voyage sources?  Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
9 - Quantity	Does this align with information in other documents for this shipment? Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
10 - Invoice details	Does this align with information in other documents for this shipment?
11 - Certification	Has the CO been certified by a competent authority e.g., a chamber of commerce? Does it bear their certification stamp and signature?  Where this is a ‘self-certified’ CO, do KYC, KYCC, and other due diligence checks raise any concerns with the stated entity?  Do all copies of the CO for a particular shipment have the same information or are there discrepancies?
12 - Exporter declaration	Does this include the stamp and signature of a chamber of commerce? If not, it may be a ‘self-certified’ CO.  Do KYC and KYCC and other due diligence checks raise any concerns with the stated entity? Do all copies of the CO for a particular shipment have the same information or are there discrepancies?