FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security Urge Increased Vigilance for Potential Russian and Belarusian Export Control Evasion Attempts

The Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS)1 are issuing a joint alert2 urging financial institutions3 to be vigilant against efforts by individuals or entities to evade BIS export controls implemented in connection with the Russian Federation’s (Russia) further invasion of Ukraine. This joint alert provides financial institutions with an overview of BIS’s current export restrictions; a list of commodities of concern for possible export control evasion; and select transactional and behavioral red flags to assist financial institutions in identifying suspicious transactions relating to possible export control evasion. This alert further reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations and details how suspected export control evasion activity may also be reported to BIS enforcement authorities.

Overview of Recent BIS Actions in Response to the Invasion of Ukraine

Since February 24, 2022, BIS has implemented a series of stringent export controls that restrict Russia’s access to specific technologies and other items that it needs to sustain its military activity in Ukraine.4 These controls primarily target Russia’s defense, aerospace, and maritime sectors. They also include other targets such as Russia’s energy production sector as well as luxury goods used by Russian Suspicious Activity Report (SAR) Filing Request: FinCEN requests financial institutions reference this alert in SAR field 2 (Filing Institution Note to FinCEN) and the narrative by including the following key term: “FIN-2022-RUSSIABIS”. 2 FINCEN & BIS JOINT ALERT elites. These controls are aligned with export controls implemented by 37 U.S. allies and partners5 and represent the most comprehensive application of Commerce’s export authorities targeting a single country.6 The United States has also applied restrictions to Belarus in response to its substantial enabling of Russia’s war effort.7 These actions are part of a coordinated international endeavor to apply economic pressure on Russia and Belarus to degrade the military capabilities that Russia uses to wage its war, and to restrict Russia’s access to items that can support the country’s defense industrial base and military and intelligence services.8 They also increase the costs on Russian and Belarusian persons who support the government of Russia and its invasion of Ukraine.9

These recent BIS actions also build on export restrictions that the United States previously established following Russia’s occupation of Crimea in 2014,10 and in response to other malign Russian activities. Some of these prior restrictions remain in effect, while others have been expanded in scope through BIS’s recent regulatory actions. These actions have imposed controls on a range of items subject to the Export Administration Regulations (EAR)11 that had not previously required export licenses when destined for Russia or Belarus. The new controls place significant restrictions on (i) U.S. exports, reexports, and in-country transfers to Russia, and (ii) products destined for Russia and manufactured abroad with certain U.S. technology, software, or tooling. BIS imposed similar controls on items subject to the EAR and destined for Belarus, including broad in-country transfer controls. With this joint alert, FinCEN is partnering with BIS to assist U.S. financial institutions in identifying customers and transactions that may pose elevated risks of attempted export control evasion.

BIS remains concerned about exports that support the development of maritime technology, microelectronics, and other technologies that can be used to support Russia’s military and defense sector. As such, all of the items listed above require a BIS license prior to export or reexport to Russia or Belarus. Additionally, the use of certain of these items by third countries to create final products that may be subsequently exported to Russia or Belarus is also prohibited. This is not a complete listing of commodities sought by or prohibited for end-users in Russia and Belarus,13 but this list of commodities that present special concern can assist in the risk-based screening of export-related financial transactions.

For More Details on the FinCEN & BIS Joint Alert (see link below)


Company Contact Information:
Thomas J. Canova
Co-Founder, CMO
Modevity, LLC  610-251-0700


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