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President Biden Issues Executive Order Banning U.S. Imports of Russian Origin Oil, Gas, and Coal

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President Biden Issues Executive Order Banning U.S. Imports of Russian Origin Oil, Gas, and Coal

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On March 8, 2022, President Biden issued Executive Order 14066 which prohibits the following actions:

-The importation into the United States of any “crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products” of “Russian Federation origin”;

-New investment in the Russian energy sector by U.S. persons, wherever located; and

-Any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of any transaction conducted by a non-U.S. person that would be prohibited by Executive Order 14066 if performed by a U.S. person or within the United States.


The Executive Order further prohibits any transaction by anyone (whether a U.S. person or a non-U.S. person) that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of Executive Order 14066’s prohibitions, as well as conspiracies to violate the prohibitions.

In a Fact Sheet, the Biden Administration stated that the Executive Order is intended to “further deprive President Putin of the economic resources he uses to continue his needless war of choice”.  A  press release from the U.S. Department of the Treasury also stated that “[t]he United States continues to take severe action to hold the Russian Federation accountable for its brutal, unprovoked invasion of Ukraine.  Treasury has targeted the infrastructure supporting President Putin’s invasion of Ukraine”.

Executive Order 14066 is immediately effective.  However, the U.S. Treasury Department’s Office of the Foreign Assets Control (“OFAC”) has issued General License 16 authorizing all transactions that are “ordinarily incident and necessary to the importation into the United States” of certain products of “Russian Federation Origin”, if performed pursuant to written contracts or written agreements entered into prior to March 8, 2022.  The products of “Russian Federation Origin” authorized for import into the U.S. under General License 16 are:

-Crude oil;

-Petroleum;

-Petroleum fuels;

-Oils, and products of their distillation;

-Liquified natural gas; and

-Coal products.

General License 16 will remain effective until April 22, 2022, at which time all such transactions will be fully prohibited.  General License 16 does not  authorize any other actions that are prohibited under the existing Russian Harmful Foreign Activities Sanctions Regulations or transactions with persons who are otherwise subject to blocking sanctions unless such actions or transactions are separately authorized by OFAC.

OFAC also issued new Frequently Asked Questions (FAQ) guidance and updated existing FAQ guidance in order to clarify certain aspects of the Executive Order.  Among other things, these FAQs establish definitions for the terms “Russian Federation origin”, “new investment in the energy sector in the Russian Federation” and “energy sector”.  The FAQs also clarify that the Executive Order’s prohibitions do not extend to products that are not of Russian Federation origin “even if such products transit through or depart from the Russian Federation”.

Additionally, U.S. Customs and Border Protection (“CBP”) issued Cargo Systems Messaging Service Number 51260049 indicating that it will “be requiring filers of entries or admissions to Foreign Trade Zones for shipments of [the Russian Federation origin banned products] to provide purchase orders and/or executed contracts and/or any other documentation showing when the order and/or contract went into effect” through the expiration of General License 16 on April 22, 2022.  CBP also stated it will require the documentation prior to unlading and it “should include conveyance information, bill of lading number(s) and entry number(s) or FTZ admission information.”

Anyone reviewing Executive Order 14066 should also be aware of the significant sanctions and export controls that the U.S. government imposed on Russia prior to Executive Order 14066.

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.

Tony Busch is an attorney in Husch Blackwell LLP’s Washington, D.C. office and is a member of the firm’s International Trade & Supply Chain practice team.

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Global Rape and Colza Seed Exports Surge Owing to Rising Supplies from Canada and the EU

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IndexBox has just published a new report: ‘World – Rape Or Colza Seed – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, global exports of rape and colza seeds jumped by +23% y-o-y to 24M tonnes, reaching $10.7B in value terms. Canada holds a leading position in global exports, accounting for nearly half of its total volume. Last year, Canada boosted its rape and colza seed exports by +42% y-o-y., while Belgium, Lithuania, the Netherlands, Latvia, Poland and Romania also saw strong growth regarding the volume of supplies abroad. In 2020, the average rape and colza seed export price remained unchanged compared to those of 2019. 

Global Rape and Colza Seed Exports

In 2020, the amount of rape or colza seed exported worldwide skyrocketed to 24M tonnes, picking up by +23% compared with 2019. In value terms, rape and colza seed exports soared by +24.2% y-o-y to $10.7B (IndexBox estimates) in 2020.

In 2020, Canada (12M tonnes) was the main exporter of rape or colza seed, achieving 49% of total exports. Ukraine (2.4M tonnes) occupied the second position in the ranking, followed by the Netherlands (2.1M tonnes) and Australia (1.7M tonnes). All these countries together took approx. 26% share of total exports. The following exporters – Hungary (810K tonnes), Lithuania (675K tonnes), France (593K tonnes), Romania (555K tonnes), Latvia (501K tonnes), Belgium (492K tonnes) and Poland (407K tonnes) – together made up 17% of total exports.

Exports from Canada increased at an average annual rate of +42.5% in 2020. At the same time, Belgium, Lithuania, the Netherlands, Latvia, Poland and Romania also recorded significant increases in their rape or colza seed exports. By contrast, Hungary, France and Ukraine illustrated a downward trend over the same period.

In value terms, Canada ($4.7B) remains the largest rape and colza seed supplier worldwide, comprising 44% of global exports. The second position in the ranking was occupied by Ukraine ($1B), with a 9.4% share of global exports. It was followed by the Netherlands, with an 8.5% share.

The average rape and colza seed export price stood at $450 per tonne in 2020, remaining constant against the previous year. Prices varied noticeably by the country of origin; the country with the highest price was France, while Canada was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Belgium, while the other global leaders experienced more modest paces of growth.

Source: IndexBox Platform

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Africa is Ready for Growth with Support from Trans-Ocean Transportation

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RTM Lines is a trans-ocean transportation company headquartered in Norwalk, Connecticut, with over 39 years of experience in the global ocean carrier business. As a respected ocean transportation provider, we are continually equipping clients with valuable information and insight related to the ocean transportation industry.  Recently, RTM Lines has invested time and research to better understand the growth of African infrastructure and resources; and how those factors affect opportunities for growth and development in the breakbulk and project cargo markets. Research shows Africa resources and opportunities in key locations such as the Democratic Republic of Congo, Ethiopia, and Northern Mozambique. 

“Right now, the Democratic Republic of Congo (DRC) is sitting on the world’s largest cobalt resource, however the ongoing political turmoil, makes it very difficult to access the cobalt,” said Richard Tiebel, RTM’s Executive Vice President. He states, “Africa is showing more exponential growth than any other continent. Right now, markets like Ethiopia have shown 8% GDP growth, per annum. Analyzation shows there are a number of factors within urbanization, ICT (Telecommunications), and the Extractives Industry (Oil, Gas, and Mining) driving this growth.” 

With an array of potential possibilities for growth in Africa in the coming years, RTM Lines recommends directing attention to trades and the international markets in Africa, specifically in the shipping and trading processes. The growth and opportunities available in the African market, have great potential for clients that develop and understand the Africa market. 

“In the next 4-5 years, city populations in Africa will double, which means the infrastructure will need development. This development will motivate the community to build infrastructure that supply power, water, sanitation, housing developments, and support to serve the new population in the area. Most governments couldn’t support fixed-line infrastructures, but Africa is going through an information, communication, and technological revolution. The private sector is supporting this revolution and allowing Africans to pursue business opportunities. Companies like Microsoft have been investing in some African tech sectors, to develop talent and to take Africa forward,” said Tiebel.

As the International Maritime Organization (IMO) 2020 regulation will soon go into effect, Tiebel shared his perspective on how Africa’s natural resources can positively influence the trans-ocean transportation industry. 

Mr. Tiebel states, “the gas in Northern Mozambique is the world’s 12th largest natural gas resource. A lot of infrastructure will be needed in order to get this gas because the town itself is very small and scarcely has roads to support it, no port, no airport, or even power and electricity. The town of Palma will literally be built up in order to access this gas resource offshore.” He continues, “the cost of the IMO regulatory change on the shipping industry is unknown, and though we know the IMO’s decision will impact refiners, producers, bunker suppliers, and more, Africa offers a variety of natural resources to emerge as a major beneficiary of this regulation. This supply of natural resources has the potential to help the trans-ocean transportation industry control the anticipated spike in fuel costs in 2020.” 

RTM Lines is committed to providing customers the information necessary to ship ocean cargo with confidence. Understanding the changes and regulations in these expanding and shifting markets is key to providing smooth transit for infrastructure, mining, and oil & gas project cargo. RTM Lines is both knowledgeable and competent in global operations. Port to port, RTM Lines strives to improve the global trade market and the quality of the ocean transportation industry.

Archives, Global Logistics, Global Trade Daily, News, Rail

KCS, Global Partners To Develop ‘Oil Train’ Terminal

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Kansas City, MO – The Kansas City Southern Railway (KCS) is partnering with New England-based Global Partners LP to develop a unit train terminal in Port Arthur, Texas.

The waterborne terminal, which will be constructed on a 200-acre parcel leased from the KCS by Global Partners, will initially serve as a destination for heavy crude from Western Canada utilizing 340,000 barrels of initial storage capacity.

When fully operational with the commencement of unit train service, the terminal is expected to have an initial capacity of up to 2 unit trains per day.

Construction of the terminal is contingent upon Global Partner’s receipt of all necessary permits.

“The Port Arthur terminal represents a significant opportunity to capitalize on strong demand for the movement of Western Canadian crude initially to one of the world’s premier refining centers in the US Gulf Coast,” said KCS President and Chief Executive Officer David L. Starling.

“Through their established base in the Northeast, North Dakota, Western Canada and the Pacific Northwest, Global,” he said, “has built an outstanding reputation for the quality of its logistics and terminal operations.”

Headquartered in Kansas City, Missouri, Kansas City Southern has railroad investments in the US, Mexico and Panama. Its primary US holding is the Kansas City Southern Railway Company, serving the central and south central US.

Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, which provides ocean-to-ocean freight and passenger service along the Panama Canal.

The railway’s North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the US, Mexico and Canada.

Headquartered in Waltham, Massachusetts, Global Partners LP is a purchaser and seller of and logistics provider for domestic US- and Canadian-sourced crude oil and other products by rail across its “virtual pipeline” from the US Midwest and Canada the East and West Coasts for distribution to refiners and other customers.

The company owns, controls or has access to refined petroleum product and renewable fuel terminal networks throughout the US Northeast, and also distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in New England and New York.

With a portfolio of approximately 900 locations primarily in the Northeast, Global also distributes natural gas and propane, and serves as the independent owner, supplier and operator of gasoline stations and convenience stores across the country.

07/24/2014

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Reports Call for End to US Petroleum Export Ban

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Washington, DC – US consumers could see their energy bills shrink and more than one million jobs would be created if the government in Washington, DC ended its nearly four decades-old ban on crude oil exports, according to two reports published by the American Petroleum Institute (API) and the industry research firm IHS.

The API report forecasts “broad-based economic gains” if the oil ban were lifted, repeating its assertion that exporting oil would economically benefit not only oil-producing states but other states as well.

Eighteen US states could gain over 5,000 jobs each in 2020 from exports of US crude oil, said Kyle Isakower, the API’s vice president for regulatory and economic policy.

Most states, he added, “could see economic activity grow by hundreds of millions of dollars due to growing energy production and downward pressure on the prices at the pump, while the US is poised to become the world’s largest oil producer, and access to foreign customers will create economic opportunities across the country.” .

“When it comes to crude oil, the rewards of free trade are not limited to energy-producing states. New jobs, higher investment, and greater energy security from exports could benefit workers and consumers from Illinois to New York, especially in areas where consumer spending and manufacturing drive growth,” said Isakower.

In its own study released the same time as the API report, Colorado-headquartered IHS predicts an end to the export restrictions “could inject $746 billion in additional investment into the economy between 2016 and 2030, while increasing domestic oil production by an average of 1.2 million barrels more per day.”

The additional crude oil supply, the report said, “would lower gasoline prices by an annual average of 8 cents per gallon with the combined savings for US motorists during the 2016-2030 period translating into $265 billion compared to a situation where the restrictive trade policy remains in place.”

A boost to the US economy would be “rapid” and “accompanied by a surge of capital that could help depress gas prices in the longer term and lower the country’s own petroleum imports by nearly 1 million b/d in 2016 for a savings of more than $43 billion, it said.

The current US oil and gas boom “is a huge win for us, but it takes a little education” for drivers to appreciate the economic benefits of flooding global markets with American crude,” the API’s Isakower said. “The public will get behind crude exports when they see a benefit for themselves.”

Last year, the Council on Foreign Relations released its own report, which concluded that, “Removing all proscriptions on crude oil exports, except in extraordinary circumstances, will strengthen the US economy and promote the efficient development of the country’s energy sector.”

06/06/2014