The US Department of Commerce's Bureau of Industry and Security (BIS), the Department of the Treasury's Office of Foreign Asset Control (OFAC), and the Department of Justice have issued a joint compliance note on the use of third-party intermediaries or transshipment points to evade Russian and Belarusian-related sanctions and export controls. The note highlights the most common tactics used to evade these controls and provides guidance to companies on how to maintain an effective, risk-based sanctions and export compliance program.
The compliance note serves as a warning to companies that may be inadvertently or intentionally circumventing sanctions and export controls. By using third-party intermediaries, companies may be able to disguise the involvement of Specially Designated Nationals (SDNs) or parties on the Entity List in transactions and obscure the true identities of end users. This could enable companies to continue doing business with Russia or Belarus, even if it violates US sanctions and export controls.
The compliance note provides guidance on what to look for if a company suspects that a customer is using a third-party intermediary to evade sanctions or export controls. It also includes recent examples of tactics allegedly used by defendants to evade detection while attempting to flout the controls. Further, the compliance note provides guidance to companies on how to maintain an effective, risk-based sanctions and export compliance program.
The US government has been increasingly using economic tools to constrain Russia and prevent the Kremlin from accessing much-needed equipment to continue its unjust war against Ukraine. Since February 2022, BIS has implemented stringent export controls that restrict Russia's access to technologies and other items it needs to sustain its illegal war in Ukraine. OFAC has also been using its broad targeting authorities against non-US persons that provide ammunition or other support to the Russian Federation's military-industrial complex.
The compliance note can be accessed here.