Red alert for sanctions evasion by sanctioned Russian elites

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 via UK enablers.

Sanctions evasion indicators

Indicators of sanctions evasion methods identified by the JMLIT include:

• changes to beneficial ownership of corporate structures to non-Russian or dual national family members or associates
• use of trust arrangements or complex corporate structures involving offshore companies
• clients connected with the individual seeking to move all assets to other financial institutions and close UK accounts
• change of address and names for Russian entities in the lead up to the invasion of Ukraine
• suspicious consulting invoices at exorbitant or clearly non-market rates
• holding companies based in offshore jurisdictions or those linked to assets in the former Soviet Union
• payments via fintechs owned in part by Russian nationals and/or others implicated in previous major trade-based money laundering schemes (often involving Baltic and Nordic states)

For the full list, download the red alert: financial sanctions evasion typologies: Russian elites and enablers (PDF 290 KB).

How to protect yourself and your firm

The JMLIT sets out a number of recommendations, including to:

• document arms-length transactions
• be alert to failures to carry out appropriate customer due diligence
• assess complex corporate structures carefully with enhanced due diligence for high-risk clients
• contact the Office of Financial Sanctions Implementation if there is reason to believe a purported change in ownership has not been transferred appropriately

In addition, the taskforce recommends that you should include code XXJMLXX and reference 0697-NECC if you decide to make a suspicious activity report.

Download the red alert: financial sanctions evasion typologies: Russian elites and enablers (PDF 290 KB)

The National Economic Crime Centre has approved the sharing of this alert with Law Society members.