Financial Intelligence Agencies Warn Of Russian Sanctions Evasion Tricks

Canada’s financial intelligence agency and European partners are tackling the sale of high-tech products into Russia in violation of sanctions enacted against Moscow.

As per the Canadian press, the joint advisory formed by the Financial Transactions and Reports Analysis Centre of Canada has raised the alert along with its counterparts in Germany and the Netherlands.

The intelligence unit stated that multiple sources refer to such dubious activities that show the alleged involvement of Russia though it is under strict monitoring for its full-scale invasion of Ukraine in 2022.

The Agencies uncovered conspiracies and plots in different territories to evade sanctions and export control measures; the same techniques used by these actors, says the Canadian press.

The list of concern items includes microelectronics and devices that work either via wireless or satellite connection.

The particular objective of this investigation is to cut off required technologies and essential goods for the Russian Federation to supply and refill its military and defense industrial base.

The agency advisory says, “To recognize if your customers are either evading sanctions or violating export controls, with dual-use items, it is always good to check the goods, and third parties linked to the transactions, as well as their financial behavior”, stated CBC.

Multiple Earlier Cases Supported The Investigation 

At the start of February 2024, two Russian-Canadian citizens were charged by U.S. justice officials with a conspiracy aimed at the delivery of electronics worth multi-billion dollars to the Russian military to be used in the war against Ukraine.

Kristina Puzyreva, a resident of Montreal, was found guilty in federal court in Brooklyn, N.Y., and was charged with a money laundering conspiracy for using parts of both UAVs and guided missiles systems, in contradiction with US export and sanctions laws, reported by Canadian media. 

In another instance in November 2023, Canadian security organizations announced to look into the allegations that a Russian university had bought devices through a British Columbia-based business that specializes in cutting-edge anti-drone technology — a possible violation of sanctions imposed on Russia due to its war against Ukraine — The defense minister Bill Blair said in a press conference.

Fintrac Advised Banks To Make A Calculated Move 

With the current findings, the advisory aims to help banks and financial institutions determine financial activities and transactions that could be associated with the procurement of goods for illegal exports as well as money laundering derived from this crime.

As per CBC, Fintrac draws a straight line between criminal money and numerous electronic reports that indicate suspicious transactions made through banks, money service businesses, insurance companies, and other institutions. Further, It shares intelligence, and suspected cases, with police and other law enforcement agencies for necessary action.

The advisory offers guidelines to reporting entities on the suitable indicators of a client avoiding sanctions. These include:

• a representative example of the same company that used to be the largest exporter to Russia before the invasion that continues to conduct the same level of activity post-invasion.
• goods are carried through Russia, by a shell company intended for use as a mask in another country.
• the payment is made using a means that is controlled by a third party that is detached from the trade process.
• in the case of shipment of goods different from the money transfer to pay for the goods.
• end products and goods are shipped to the countries next to Russia; there they can be redirected to the sanctioned jurisdiction by middlemen.

The advisory report was drafted jointly by the correspondence units of the three countries in collaboration with the United States Department of the Treasury’s Financial Crimes Enforcement Network.