UK Closes Down the ‘Refining Loophole’ While Mitigating Energy Market Strain via Targeted Licensing

• the import into the UK of oil products falling within commodity code 2710, which have been processed in a third country from oil and oil products originating in Russia;
• the import into the UK of uranium consigned from, or originating in, Russia;
• the acquisition (directly or indirectly) of uranium originating in, or located in, Russia;
• the supply or delivery (directly or indirectly) of uranium from a place in Russia to a third country;
• the supply or delivery (directly or indirectly, including ship-to-ship transfers) of LNG from a place in Russia to a third country or from one third country to another third country, where such LNG falls within commodity code 2711 11 00 and originates in, or is consigned from, Russia;
• the provision (directly or indirectly) of brokering services, financial services and funds relating to all of the above activities; and
• the provision (directly or indirectly) of technical assistance relating to the above activities concerning third country processed oil products and uranium.

• Sanctioned processed oil products: the GTL facilitates the movement of diesel and jet fuel made using Russian oil (which would otherwise be captured by new UK sanctions prohibitions on Russian oil products). The GTL is currently of indefinite duration, though is subject to periodic review and may be varied, revoked or suspended at any time.
• Maritime transportation of LNG: the GTL permits the maritime transport of LNG connected to specified Russian projects (specifically, to shipments from Sakhalin‑2 and Yamal LNG terminals) to destinations outside the UK, as well as associated financial and brokering services. The GTL applies on a time‑limited basis until 1 January 2027 and applies to contracts with a duration of one year or less.

To whom do the licences apply

• any UK person (and, where relevant, persons within UK territorial jurisdiction) may rely on the GTLs if their activity falls squarely within the permitted acts and all conditions of the specific licence are met (including record‑keeping and, importantly, any notification/registration requirements expressed in the licence);
• counterparties and intermediaries (for example, shipowners, charterers, insurers, port service providers, commodity traders, storage operators and financial institutions) can also rely on the GTLs, again only to the extent their role is expressly covered and they adhere to licence conditions. For parties outside UK jurisdiction, it is important to confirm whether and how UK sanctions touchpoints arise (for example, via a UK territorial nexus, or involvement of UK persons such as UK insurers or UK‑flagged vessels).

How the licences are expected to work in practice

Commentary

Key takeaways / how to stay ahead of the curve

• Build licence conditions into contracts and operations: parties should ensure contracts/agreements are up-to-date to take account of the latest restrictions and applicable GTL cut‑off dates in operational plans.
• Monitor renewals and changes: GTLs and the underlying restrictions can be amended, suspended, or revoked. Parties relying on the GTLs or exceptions should track updates and flag expiry dates and wind-down periods well in advance in order to mitigate compliance risk.
• Keep the broader sanctions picture in view: a GTL is not a blanket waiver. Parties should continue to assess UK nexus and separate/parallel regimes (including UK sanctions against jurisdictions other than Russia, as well as the EU and US sanctions regimes) for multi‑jurisdictional voyages and trades. If the transaction touches EU/US persons or the US financial system, these implications should be considered separately.