In case you missed it, FinCEN issued an updated alert regarding continued vigilance for Russian Evasion Attempts on May 19, 2023 (FIN-2023-Alert004)
Since the start of Russia’s war against Ukraine began in 2022, Russia has lost significant equipment on the battlefield and is attempting to replace it. Russian intelligence continues to seek out ways to circumvent sanctions and export controls. It’s also not just actual battlefield equipment that is needed. Advanced electronics and testing equipment used in military applications are also being sought by the Russians.
Besides the obvious Office of Foreign Assets Control (OFAC) and Specially Designated Nationals and Blocked Person’s List (SDN List), financial institutions need to be aware of the involvement of third-party intermediaries and transshipment points along with the use of shell and front companies.
Conducting appropriate due diligence is critical and aids in identifying red flags and anomalies. The FinCEN alert specifically includes the following considerations:
Evaluating the customer’s date of incorporation (e.g., incorporation after February 24, 2022),
Evaluating the end user and end use of the item (e.g., whether the customer’s line of business is consistent with the ordered items), and
Evaluating whether the customer’s physical location and public-facing website raise any red flags (e.g., business address is a residence, no website is available).
If a SAR filing is required, FinCEN requests institutions reference “FIN 2022-RUSSIABIS” in SAR Field 2 (Filing Institution Note to FinCEN) and the Narrative. Institutions should also check box 38(z) Other Suspicious Activity and note “Russia Export Restrictions Evasion.”
Published
2023/06/23
