Financial intelligence sources have identified sanctioned Russian individuals using a range of methods to evade sanctions imposed following the invasion of Ukraine.
This includes using family members and associates to access, transfer and/or sell frozen assets through UK facilitators.
Sanctions Circumvention Indicators
Indicators of sanctions evasion methods identified by JMLIT include:
- changes in the beneficial ownership of corporate structures to non-Russian or dual citizenship family members or associates
- use of trust agreements or complex corporate structures involving offshore companies
- person-related clients seeking to transfer all assets to other financial institutions and close accounts in the UK
- change of address and name of Russian entities before the invasion of Ukraine
- suspicious consulting bills at exorbitant or obviously out-of-market rates
- holding companies based in offshore jurisdictions or those related to assets in the former Soviet Union
- payments via fintechs partly owned by Russian nationals and/or others involved in previous large trade-based money laundering schemes (often involving Baltic and Nordic states)
How to protect yourself and your business
The JMLIT sets out a number of recommendations, in particular for:
- document arm’s length transactions
- be alert to breaches of due diligence to customers
- carefully assess complex corporate structures with increased due diligence for high-risk clients
- contact the Office of Financial Sanctions Implementation if there is reason to believe that a purported change of ownership has not been properly transferred
In addition, the working group recommends including code XXJMLXX and reference 0697-NECC if you decide to report suspicious activity.
The National Economic Crime Center has approved sharing this alert with members of the Bar.