UK Sanctions Dutch Oil Trader for Trafficking in Russian Oil

Paramount DMCC has been linked to the trade in Russian oil from the Pacific port of Kozmino (above), which has consistently priced above the G7 cap (file image)

Published Feb 22, 2024 10:02 PM by The Maritime Executive

The government of Britain has sanctioned Swiss trading house Paramount Energy & Commodities SA and its owner for alleged violations of the G7 price cap.

Switzerland has been a hub for Russian oil-trading for years, and Paramount SA was one of a group of Swiss-linked firms that accepted the reputational risk of trading Russian oil after the invasion of Ukraine. According to Swiss investigative journalism outlet Public Eye, Paramount may have had ties to a prominent Russian oligarch, Gunvor founder Gennady Timchenko, who is now subject to Swiss, European and American sanctions. The firm has denied any connection to Timchenko. 

Once efforts to sanction Russian oil got under way in Europe in mid-2022, a Dubai-based firm with a similar name, Paramount Energy and Commodities DMCC, began executing a similar trading pattern. The UAE does not require any compliance with the G7 price cap on Russian oil, allowing anonymously held subsidiaries to carry out transactions priced above $60 per barrel without repercussions or transparency. (Paramount DMCC and Paramount SA have no formal legal links, only similar names and reported trading patterns, and they deny any connection to each other.)

Previous reporting by the Financial Times has linked Paramount DMCC to the Kozmino oil trade, which has been consistently priced above $60 - and may have been underwritten by at least one Western insurer, which would be a potential breach of the G7 cap.

Paramount DMCC was sanctioned by the UK in November 2023. At the time, the UK foreign office said that the Dubai-based firm was “known to employ opaque ownership structures and has been used by Russia to soften the blow of oil-related sanctions."

More recently, Paramount SA has come under investigation by authorities in Switzerland in connection with Paramount DMCC's activities in the Russian oil-trading market. Swiss law does not hold Swiss firms accountable for all of the actions of their overseas subsidiaries, but there are other potential penalties. On Thursday, the UK government asserted that Paramount SA and Paramount DMCC have been "involved in obtaining a benefit from or supporting the government of Russia," and placed sanctions on Niels Troost, linking him to both firms. (Paramount DMCC has denied links to Troost.)

"Troost facilitates the unfettered trade of Russian oil outside the reach of UK and G7 sanctions," the UK government alleged. 

The announcement was part of a package of new restrictions on Russian defense firms that had managed to escape previous rounds of sanctions, including manufacturers of rocket launch systems, missiles, explosives, machine tools and other goods for making and using military equipment. This includes Sverdlov State Owned Enterprise, the largest Russian maker of ammunition.