Red alert for sanctions evasion by sanctioned Russian elites
The Joint Money Laundering Intelligence Taskforce (JMLIT) has issued a red alert on common techniques suspected of being used by sanctioned Russian elites and their enablers to evade sanctions. Learn what red flags to look out for and how to protect your firm.
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)
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.
The National Economic Crime Centre has approved the sharing of this alert with Law Society members.
Find out more
Read a summary of the sanctions imposed on Russia in response to the invasion of Ukraine.
Check our guidance on the UK sanctions regime to find out how to comply.
Develop your understanding of anti-money laundering (AML) with our AML training course bundle. It covers suspicious activity, the money laundering offences, risk assessments and due diligence.
Demonstrate your AML expertise and technical skills with the Risk and Compliance Advanced (AML) Accreditation.