The US Financial Crimes Enforcement Network (FinCEN) announced a Financial Trend Analysis (FTA) highlighting critical trends for Russian export controls sanctions evasion. The patterns came from Bank Secrecy Act (BSA) suspicious activity reports (SARs) US depository institutions submitted in response to joint alerts issued by FinCEN and the Bureau of Industry and Security (BIS). One noted evasion tactic relates to American products that are secretly chipped to intermediaries that sell them to Russia. Reported activity showed that US-based companies in industries capable of Russian military, intelligence, and industrial support had transferred goods to Russian end-users in similar industries. These transfers occurred directly and through intermediaries in Asia, the Middle East, Europe, and the UK. The intermediaries often used transshipment tactics, transferring the goods through third countries to Russia. Such activities may be violations of law where the US companies were aware of the end users. Whistleblowers who wish to report these activities may do so anonymously through a lawyer under the FINCEN or SEC whistleblower programs.
Here are three other trends in sanction evasions:
- The role of the US, China, and Hong Kong in supplying Russian users – In the 333 reports filed, the United States was mentioned as a subject country 976 times. Russia was mentioned 322 times, with China and Hong Kong receiving 130 and 126 references as suspicious activity subjects respectively. According to FinCEN, entities in these countries, as well as Turkey and the United Arab Emirates (UAE) have been involved in trading potentially sensitive goods with or on behalf of Russia.
- The role of the electronic industry in export control evasion – Most companies implicated in the reports were multijurisdictional and involved in the electronics sector, both in the US and abroad. These included manufacturers or sellers of microelectronic components, electromechanical instrumentation, and imaging technology.
- The involvement of the industrial machinery industry in supporting Russia – These additional companies supplied gas compressors, welding equipment, precision tungsten rods, and other related goods.
Jeffrey Newman Esq. represents whistleblowers under the SEC, CFTC and FINCEN whistleblower programs. Persons providing original information to these agencies through counsel, may receive rewards totaling up to 30 percent of a successful recovery made by the SEC, CFTC OR FINCEN and the names and identification of the whistleblowers are confidential. Jeff Newman can be reached at Jeff@Jeffnewmanlaw.com or at 617-823-3217
