U.S. And EU Regulators Provide Insights On Sanctions And Export Evasion Risks

On September 11, 2023, the Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis detailing trends in suspected evasion of export controls on Russia. FinCEN's analysis is informed by reports provided by financial institutions under the Bank Secrecy Act (BSA), such as Suspicious Transaction Reports. The information is helpful for identifying particular industries and countries that present higher risk for circumvention, and to highlight tools that nefarious actors are using to get U.S. export controlled goods into Russia.

FinCEN identified China and Hong Kong as the highest risk countries. Other countries in the top ten were Turkey, the United Arab Emirates (UAE), the United Kingdom, Canada, Singapore, and Cyprus. Many of the examples of suspicious transactions involved entities, often intermediaries or subsidiaries, based in these countries and using complex corporate structures to hide the Russia nexus. In one example, a UAE company