Britain eases Russian oil curbs

Britain has carved out an exemption to new Russia sanctions that were supposed to stop refined fuels made from Russian crude entering the UK through third countries. A trade licence published by the Department for Business and Trade on May 19 allows imports of diesel and jet fuel processed abroad from Russian crude, even as a broader ban on such products took effect on May 20. The move drew criticism from Ukrainian and European figures after ministers had presented the wider package as a step to tighten pressure on Moscow. The exemption came as governments grappled with fuel market disruption linked to the Middle East and the closure of the Strait of Hormuz. ### What exactly did Britain change? The Department for Business and Trade said on May 19 that its “General Trade Licence for sanctioned processed oil products” permits the import into the UK of diesel and jet fuel processed in third countries from Russian crude oil. The notice identifies diesel under HS codes 2710 19 42 and 2710 19 44, and jet fuel under HS code 2710 19 21. (gov.uk) The underlying regulations were made on May 18, laid before Parliament on May 19 and came into force on May 20. Separate government guidance says the new prohibition was designed to stop Russian crude from entering the UK by the “back door” after processing in third countries, and that the broader approach was aligned with the European Union. (gov.uk) ### Why are diesel and jet fuel still allowed in? Keir Starmer said in the House of Commons on May 20 that the government had issued “two targeted short-term licences to phase the new sanctions in and protect U.K. consumers,” according to Politico. Trade Minister Chris Bryant said the exemptions for jet fuel and diesel were “temporary” and would be suspended “as soon as we possibly can.” He also said, “We’ve handled this clumsily and that is entirely my fault and I apologize.” (gov.uk) Politico reported that ministers released the licence without publicity as concerns grew over diesel and jet fuel supplies after the U.S. and Israeli war on Iran and the effective closure of the Strait of Hormuz. Government guidance, however, says the licence itself took effect on May 20 and requires record-keeping by users. (politico.eu) ### Why did the move anger Ukraine? Oleksiy Goncharenko, a Ukrainian member of parliament, said the British decision put “a question mark” over the UK’s friendship with Ukraine. He told Times Radio, as quoted by The Independent, that Britain’s support had been an important part of Ukraine’s resilience and that he was “deeply disappointed.” (gov.uk) The Independent reported that Goncharenko also said the decision showed Russia that “everything can be bought and everything is for sale.” His criticism came after the licence allowing imports of Russian jet fuel and diesel refined in third countries took effect on Wednesday, May 20. ### How does this fit with the G7 line on Russia? (independent.co.uk) G7 finance ministers and central bank governors said in their May 19 communiqué that they would continue to consider additional pressure on key sectors of Russia’s economy, including energy, finance and its military-industrial base, through coordinated measures and action against circumvention. The communiqué was issued after meetings in Paris on May 18 and 19. (independent.co.uk) Politico reported that EU officials said Britain’s decision was a surprise and was not raised at the G7 finance ministers’ meeting. That left the UK exemption at odds with the public language in the communiqué about maintaining pressure on Russia and addressing third-country support for its war effort. (mof.go.jp) ### What happens next? The licence published by the Department for Business and Trade says it is subject to record-keeping requirements, and the government’s guidance directs importers to compliance rules under Notice to Importers 2953. Ministers have not published an end date in the licence text surfaced on GOV.UK, while Starmer and Bryant have described the carve-out as short-term or temporary. (politico.eu) Parliament will now have to consider the Russia amendment regulations under the sanctions law’s approval process, because the statutory instrument was laid before both Houses on May 19 after being made on May 18. Any further change to the carve-out would also appear through the same government sanctions and trade licensing channels. (legislation.gov.uk) (gov.uk)