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Suspicious Activity Potentially Russia Export-Evasion Related

The Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis (FTA) on patterns and trends contained in Bank Secrecy Act (BSA) reporting on suspected evasion of Russia-related export controls.

The BSA reports analyzed for this FTA were filed in response to previous joint Alerts on this topic and indicate almost $1 billion in suspicious activity.

“Following Russia’s invasion of Ukraine, FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued two joint Alerts urging vigilance on the part of U.S. financial institutions for potential attempts by Russia to evade U.S. export controls,” said Acting FinCEN Director Himamauli Das. “We appreciate our strong partnership with financial institutions and their continued efforts to provide significant financial intelligence leads and indications of potential Russia-related export control violations.”

“Our partnership with FinCEN has illuminated Russian efforts to evade our export controls through the receipt of targeted suspicious activity reports (SARs) from financial institutions,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “We have used these SARs to initiate investigations of export control violators, as well as designate parties on our Entity List to deprive Putin’s war machine of technologies it needs to prosecute its illegal invasion of Ukraine.”

BIS leverages information from BSA reporting filed in response to the joint Alerts by providing leads to their export enforcement agents to help predicate new investigations and support preexisting investigations.

BIS also uses the information gleaned from BSA reporting to identify parties in Russia and third countries acting contrary to U.S. national security and foreign policy interests, leading to their designation on the Entity List and imposition of license requirements for transactions subject to the Export Administration Regulations. Both of these efforts disrupt the ability of foreign parties to evade BIS export controls.

The FTA describes several trends found in this BSA reporting:

  • Suspicious transactions conducted after Russia’s invasion indicate that companies in intermediary countries appear to have purchased U.S.-origin goods on behalf of Russian end-users.
  • Suspicious transactions link trade activity, likely involving sensitive items, between end users in Russia and other jurisdictions, particularly China, Hong Kong, and Turkey.
  • The majority of companies within the dataset are linked to the electronics industry and are potentially associated with—or directly facilitating—Russian export control evasion.
  • Companies in the industrial machinery industry are also potentially supplying Russia with equipment.

FinCEN anticipates that new trends in BSA data may emerge as more individuals and entities are publicly identified as being potentially connected to evasion of Russia-related export controls.

For formal guidance to financial institutions on reporting suspicious activity related to Russia-linked actors, please refer to FinCEN’s resource page on advisories here.

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

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