Two container ships recently placed on a US blacklist are about as far from the Ukraine crisis as a Russian ship can be.
Satellite tracking data shows the 822-teu Fesco Magadan and Fesco Moneron (both built 2003) spend most of their time on a milk run in Russia’s east — Vladivostok and the port of Magadan, which are both thousands of kilometres from the Black Sea region where the winds of war are raging.
TradeWinds reporters across the globe are covering the shipping implications on the Russia-Ukraine crisis.
Yet they found themselves at the sharp end of US President Joe Biden’s sanctions stick because of their links to OOO PSB Lizing, a lease financier better known in English as PSB Leasing.
When the US government added five ships to its sanctions list after what Biden described as the start of Russia’s invasion of Ukraine, the administration said it was because they were owned by PSB.
While two sanctioned tankers have been linked to the Iran trade, it is not clear that the US has targeted the Fesco Moneron and Fesco Magadan for anything other than their links to a targeted lease financier.
Shipping databases list the vessels as controlled by Fesco Transportation Group, a Moscow-headquartered shipping company that is not listed on any US blacklist.
TradeWinds has requested comment from PSB and Fesco about the move.
The impact on Fesco may be minimal, given that the ships trade on a domestic route.
More ahead
But sanctions are expected to ramp up if Russian President Vladimir Putin expands his bellicose moves in Ukraine.
And the latest sanctions show that the financiers that Russian shipping companies turn to for cash are in the sights of Washington.
For example, also added to the Specially Designated Nationals list was VEB, which provided financing for Sovcomflot’s fleet of Arctic LNG carriers, most recently funding 10 such ships for Sovcomflot’s Smart LNG joint venture with Novatek.
PSB Leasing is among 17 of 42 subsidiaries of major government-controlled bank Promsvyazbank Public Joint Stock Co (PSB) that were sanctioned by the US on Tuesday. The US Treasury Department said it was targeted in part because of its role in military financing, but they also pointed to its role in shielding major commercial Russian banks from sanctions.
“The GoR [government of Russia] has also tasked PSB with providing credit to entities under US and partner nations’ sanctions so that other lenders, namely Sberbank and VTB Bank, can offload the risk of conducting business with sanctioned entities,” the US Treasury said.
Still, sanctions experts said that at this stage, the Biden administration is targeting VEB and PSB while leaving out bigger commercial banking players because their targets are the Russian government and oligarchs and are averting sanctions that hurt the pocketbooks of the Russian people.
“If they would have gone after Sberbank or one of the big commercial banks, that would have impact for lots of US business but also for average [Russians],” said Jonathan Epstein, a lawyer at US law firm Holland & Knight.
But if Russian troops march further into Ukraine, it remains unclear how much wider the sanctions net will extend, and how much deeper into shipping it will reach.
