The Vladimir Voronin continued towards Montoir, where its cargo was reloaded onto a Shell-chartered vessel, the Paris Knutsen, destined for Kuwait.
Unearthed identified five cargoes linked to Shell that appear to have relied on Atomflot’s icebreaking services between December 2023 and April 2024.
Customs declarations, open-source reporting and ship tracking revealed that each of the cargoes was then transshipped at Montoir onto a Shell-chartered vessel, and delivered to a customer in India, Kuwait or Turkey.
Given the scale of Shell’s contract to buy from Yamal LNG it is possible that the company bought further cargoes of gas for use within the EU that also relied on Atomflot escorts, but this cannot be confirmed using information in the public domain.
Unearthed also identified dozens of further cargoes that were listed by Kpler as being bought by European clients, including TotalEnergies and Naturgy. In a sample of 30 of these shipments that Unearthed analysed from between December 2023 and May 2024, 23 were escorted by Atomflot-operated icebreakers to navigate the frozen Gulf of Ob.
Economic resources
Atomflot charges for its icebreaking services, and therefore is likely to receive a financial benefit for its involvement in the shipments to Europe. This raises questions over whether Shell, as a UK-listed company, has breached British financial sanctions, according to Fergus Randolph KC, a barrister with expertise in financial sanctions at Brick Court chambers, who Unearthed commissioned to examine the legal position of the shipments.
Companies and individuals are barred by Regulation 11 of the UK’s Russia financial sanctions package from dealing with the “economic resources” – a broad category that could include Atomflot’s icebreaking services – of sanctioned parties, if they know or should suspect about the sanctions. They are also barred by Regulation 13 of the same package from payments to third parties that they know, or should reasonably suspect, will benefit a sanctioned individual or company.
Peter Caldwell, a barrister with expertise in sanctions at Doughty Street chambers, told Unearthed that Regulation 13 would be particularly relevant.
“If the premise is correct that funds have been made available for the benefit of Atomflot, then, depending on whether the parties were aware of this, that could be a breach of financial sanctions,” he said.
“The crucial evidential issue would be whether it was known or the carrier had reasonable cause to suspect that Atomflot was to receive a significant financial benefit for the use of the icebreakers.
“Any business arrangement that is contingent on the participation of a designated person is likely to be at very high risk of a breach of sanctions. Even where there is no direct payment to a [designated person], where it appears that their participation has necessarily been priced into the purchase costs, that might well give the buyer reasonable case for suspicion.”
If the courts or the Treasury’s sanctions regulator, the Office of Financial Sanctions Implementation (Ofsi), found that Shell had breached sanctions, this could be a criminal offence. Ofsi has imposed fines on 10 companies under the sanctions since 2016 and is understood to be investigating 318 further potential breaches.
European companies are similarly blocked from transactions that would – directly or indirectly – make funds available to sanctioned entities, under Article 2 of the EU’s financial sanctions on Russia. It is down to individual member states to enforce EU sanctions.
Shell said it complied with “all applicable sanctions and regulations.”
Naturgy said it had “no contractual relationship whatsoever with third parties that are subject to sanctions from the EU,” but did not respond when asked to comment on the suggestion that Atomflot could have received payment for escorting shipments of gas to Naturgy.
TotalEnergies did not respond to a request for comment.