Treasury Secretary Janet Yellen recently conceded the cap’s effectiveness had faded and its rules were being flaunted, adding that the coalition would consider ways to repair the program.
EU officials have also acknowledge privately that the cap isn’t working as it should and say the G-7 — which leads the measure — could look at ways to enforce it more effectively. G-7 finance ministers meet this week in Marrakech, Morocco.
“The first thing you could do is simply begin more aggressive investigation into the attestation regime,” Harris said, referring to the pricing documents that service providers must collect for any shipment of Russian oil they back. “Put companies on notice that the attestation system will be taken seriously.”
Harris said that as a second step, the coalition should pressure countries that control key passage points — like Denmark, Turkey and Egypt — to turn back Russian vessels that represent an environmental threat because of their age or lack of reliable insurance.
Finally, Harris said, countries need to raise the cap’s price level and then adjust it, up or down, more frequently in response to moves in global prices.
“You need a price cap which both preserves as big a spread as possible but still allows for a reasonable level of trade,” Harris said.
Harris acknowledged it’ll be tough to get all countries on board with a higher price level, but said his proposal would strengthen the cap’s credibility, bring Russian revenue down and lower the risk of a disastrous spill involving one of Russia’s rickety tankers.
