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Syed Rahman and Ulrich Schmidt of Rahman Ravelli outline the case and the issues involved.
A British financier who bought ships that eventually became part of Russia's shadow fleet has had sanctions against him lifted.
The UK government has removed 75-year-old John Michael Ormerod from its sanctions list, which he had been on since 9 April 2025. He had been placed on the list after acquiring dozens of second-hand tankers that Lukoil, Russia' second-largest oil producer, used to transport billions of dollars' worth of oil.
Ormerod has said being placed on the sanctions list had a devastating impact on him and his family. His removal from the sanctions list came after he publicly warned others against becoming involved in any business dealings that could help Russia.
He added: "To be clear, I wholeheartedly condemn the Russian invasion of Ukraine. I urge others to be watchful. It is easy to be caught up unwittingly in the sanctions regime as I was."
Froze
The sanctions froze Ormerod's UK bank accounts and other assets as part of British efforts to harm Russia's military efforts and running of a shadow fleet of ships illicitly transporting oil around the world.
Investigative journalist organisations the OCCRP (the Organized Crime and Corruption Reporting Project) and Follow the Money stated last year that Western shipowners earned at least $6.3 billion selling aging tankers to shell companies which went on to become part of Russia's shadow fleet.
Ormerod's involvement in such activities was identified in October 2024 when the Financial Times reported that he had acquired at least 25 tankers between December 2022 and August 2023 for more than $700 million. Each ship was bought through a separate special purpose company in the Marshall Islands, with funding provided by Lukoil's shipping company, which is itself subject to sanctions. Those ships transported over 120 million barrels of Russian oil after they were purchased.
Proactive
A proactive, risk-based approach to compliance is necessary to ensure there is no chance of any company or individual becoming entangled in sanctions-related difficulties. Due diligence needs to be conducted on the entire supply and delivery chain.
Ignorance is no excuse. Those in business must ensure they are always up to date with all sanctions regimes that could affect their activities - and be aware of all indicators of possible breaches of these regimes.
Complex or opaque corporate structures, companies that have only recently been set up and firms where it is unclear who is the beneficial owner can all be signs of attempts to evade sanctions. There is also a need to be especially careful when dealing with customers in areas considered to be high risk when it comes to sanctions. These include countries that may be functioning as a delivery channel for another country that is subject to sanctions, as Kazakhstan does for Russia.
Each company will face its own set of circumstances and its own sanctions risks. The obligation is on each company to recognise and address those risks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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