A General License Is Not a Statute: The Russian Diesel Cargo and Everyone in the Chain

On 27 October, Senator Richard Blumenthal wrote to the managing director of a Greek shipowner and told him to turn his ship around.

The vessel is the Malta-flagged Agioi Fanendes, which loaded close to 40,000 metric tons of ultra-low-sulfur diesel at the Russian Baltic port of Primorsk on 22 October. Shipping data cited in the letter showed it signaling the Port of New York and New Jersey with an expected arrival of 7 November. The owner is Eastern Mediterranean Maritime Limited, and the letter went to its managing director, Athanasios J. Martinos.

“The President may have given a license to facilitate this transaction,” Blumenthal wrote, “but only Congress can make it legally valid.”

That sentence is the whole problem, and it reaches further than one cargo. Every party behind that voyage is now relying on a general license whose reach is being publicly contested by people who may chair the committees that investigate it. For brokers, insurers, and terminal operators, this is the clearest live example in years of why an OFAC license is not the end of a compliance analysis.

What General License 135 Actually Says

Read the instrument rather than the headlines, because its own text defines the argument.

GL 135 was issued on 9 October 2026 by OFAC Director Bradley T. Smith. It is headed with the two regulations it operates on: the Russian Harmful Foreign Activities Sanctions Regulations at 31 CFR part 587, and the Ukraine/Russia-Related Sanctions Regulations at 31 CFR part 589.

Paragraph (a) authorizes all transactions prohibited by those two parts that relate to the sale, delivery, offloading, or importation, including importation into the United States, of diesel fuel of Russian Federation origin, through 12:01 a.m. eastern daylight time on 7 April 2027.

Paragraph (b) carves out one thing. It does not authorize any debit to an account at a U.S. financial institution belonging to the Central Bank of the Russian Federation, the National Wealth Fund, or the Ministry of Finance.

That is the entire license. Two paragraphs, two regulations, one carve-out.

What it does not mention anywhere is the Ending Importation of Russian Oil Act of 2022, the statute passed after the invasion of Ukraine that prohibits importing Russian-origin petroleum products including diesel.

Why That Matters

OFAC’s own framework explains the limit. A general license authorizes categories of transactions that would otherwise be prohibited pursuant to a particular sanctions program. It is an instrument that operates within the program it is issued under.

Practitioners have made the narrower version of this point already. GL 135 does not authorize conduct that remains prohibited under a separate OFAC sanctions program, so a counterparty caught by another program is not cleared by this license. The lawmakers are making the broader version. If a license cannot reach across to another OFAC program, it cannot reach across to an Act of Congress either.

The congressional position is that the 2022 Act contains its own procedure for terminating the import ban, involving consultation with Congress, certification of specified conditions concerning Russia and Ukraine, and a review period, and that the administration has not used it. They also point to congressional review requirements under CAATSA for Russia-related licensing actions that significantly alter U.S. foreign policy. Blumenthal’s formulation is that no license can supersede clear, unambiguous law.

The Treasury maintains the arrangement is lawful. The White House defends it as necessary to ease fuel costs during the disruption caused by the war with Iran.

Nord Young takes no position on who is right. What matters commercially is that the question is open, that it is being contested publicly rather than resolved, and that outside analysts have flagged GL 135 as sitting in tension with the 2022 Act and potentially subject to legal challenge.

The Pressure Is Aimed at the Chain, Not the Buyer

This is what makes the episode worth studying rather than just reading.

On 24 October, a bipartisan group wrote to six banks and four port authorities. The banks were JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. The port authorities covered Houston, Beaumont, Corpus Christi, and New York and New Jersey.

The letter asked them to preserve records relating to Russian diesel transactions, including shipping documents, vessel records, contracts, and communications with government officials, with confirmation requested by 28 October. It urged them not to participate in the purchase, transportation, importation, unloading, storage, financing, or distribution of Russian-origin diesel, and not to facilitate shipments to other markets under the temporary relief.

It was led by Senator Jeanne Shaheen, ranking Democrat on the Senate Foreign Relations Committee, and signed by Senators Chris Coons, Elizabeth Warren, Ron Wyden, Sheldon Whitehouse, and Thom Tillis, along with Representative Gregory Meeks.

On 27 October, Blumenthal went further and asked the shipowner to identify everyone else. EASTMED was asked to name the cargo’s seller, purchaser, charterer, insurer or P&I provider, terminal operator, and any entity responsible for distribution, and to say whether it had received instructions from the Treasury or any other federal agency. The deadline is 31 October.

Read that list again. The insurer and the P&I club are named explicitly, alongside the charterer and the terminal. This is not scrutiny of an importer. It is a demand that an owner disclose everyone who touched the voyage, including the people who insured it.

The Timing

The midterms are on 3 November.

Several signatories to the 24 October letter would be in line to chair committees if control of Congress changes. A document preservation demand issued the week before an election, by members who may acquire subpoena power the week after, is not routine correspondence.

The Two Risks Nobody Is Pricing

Beyond the statutory question, two further exposures sit in this trade and neither is obvious from the license.

A U.S. license does nothing about the UK and EU. The UK prohibition on the supply and delivery by ship of Russian diesel remains in force, as does the EU prohibition on trading, brokering, and transporting it. As we set out in the piece on sanctions divergence, a U.S. authorization does not resolve the position of a UK or EU operator, a London market insurer, or a European bank. For most of the service providers in a tanker voyage, GL 135 changes nothing at all.

A general license can be withdrawn. GL 135 runs to April 2027 on its face. But general licenses issued under other sanctions regimes as negotiating tools have been withdrawn quickly when negotiations broke down. A company that structures a trade on the assumption of eighteen months of authorization is taking a position on the durability of a diplomatic arrangement, not relying on a stable regulatory permission.

What This Means for Compliance Practice

We argued in the divergence piece that screening returning a single answer is no longer screening. This is the same problem arriving from a direction most programs do not watch.

An OFAC license answers one question. It tells you Treasury has authorized the transaction under the regulations named in the license. It does not tell you that no other federal statute prohibits the conduct, that no other OFAC program catches your counterparty, or that another jurisdiction permits it.

Read which regulations the license names. GL 135 names two CFR parts on its face. That is the scope. Anything outside those two parts is a separate question requiring a separate answer.

Check what created the underlying prohibition. A license lifting a prohibition created by executive order is routine. A license said to lift one created by statute is the argument now running in public.

Assume records will be demanded. They already have been. Anyone in this trade should be preserving shipping documents, contracts, vessel records, and communications with government agencies now, whether or not they received a letter.

Expect to be named by someone else. EASTMED was asked to identify its insurer and P&I provider. Parties who never considered themselves principals are being disclosed to Congress by their own counterparties.

What Each Party Should Be Doing

Owners. Know what your charter party says about lawful trades and about orders you may refuse. A voyage order authorized by one branch of government and challenged by another is exactly what a sanctions clause is for, and as we covered previously, most clauses say nothing useful about licenses. Get advice before fixing, not after loading.

Charterers and traders. Your counterparty may be asked to name you. Assume that seller, buyer, charterer, and distributor will all be identified, because that is what has been requested here.

Insurers and brokers. The P&I provider is on the disclosure list. Sanctions limitation clauses operate by reference to the sanctions laws applicable to the insurer, and an insurer answering to UK or EU regulators faces prohibitions that GL 135 does not touch. A U.S. general license does not resolve a London market position, and it does not resolve a statutory question either.

Terminal operators. Four port authorities have been asked to preserve records and to avoid facilitating unloading, storage, or distribution. A terminal taking this cargo is in the frame directly.

Banks. Six institutions have already been written to. Finance is the practical chokepoint, and a bank declining to participate stops the trade regardless of how the legal question resolves.

The Bottom Line

For years the compliance question in sanctions work has been whether a transaction is prohibited, and a general license has been a reliable answer.

This episode puts a different question in front of operators. Not whether Treasury has authorized the conduct, but how far that authorization reaches, and what happens to the parties in the chain if it reaches less far than they assumed.

GL 135 is two paragraphs long and names the two regulations it operates on. It is silent about the 2022 statute, silent about other OFAC programs, and irrelevant to the UK and EU prohibitions that remain in force. None of that makes it defective. It makes it narrow, which is what general licenses are.

The Agioi Fanendes loaded at Primorsk on 22 October and was signaling New York for 7 November, four days after an election that may change who holds subpoena power. Where it eventually discharges is a commercial decision that may yet change. The lesson for everyone else does not depend on the answer.

A license tells you what one agency has permitted under one set of regulations. It does not tell you what the law allows.