On June 28, 2022, the Monetary Crimes Enforcement Community (FinCEN) and the U.S. Division of Commerce’s Bureau of Business and Safety (BIS) issued a uncommon Joint Alert targeted on the intersection of anti-money laundering and export management compliance. Directed at monetary establishments coated by the Financial institution Secrecy Act (BSA), the Joint Alert goals to assist these entities determine reportable situations of potential export management evasion in reference to the Russian invasion of Ukraine.

In response to Russia’s invasion of Ukraine, BIS has carried out a collection of controls focusing on Russia’s protection, aerospace, and maritime sectors, amongst others. Notably, the controls place important restrictions on U.S. exports, reexports, and even in-country transfers to Russia, in addition to merchandise destined for Russia and manufactured overseas with sure U.S. know-how and/or de minimis U.S. content material.

To assist monetary establishments determine suspicious transactions associated to potential evasion of those controls, the Joint Alert outlines commodities of explicit concern which may be used to additional the navy and protection capabilities of Russia and Belarus and that require a BIS license previous to export or reexport to Russia or Belarus. These commodities embrace plane gear, antennas, GPS techniques, and cameras, amongst others.

The Joint Alert additionally outlines sure transactional and behavioral pink flags for export management evasion, together with:

• Transactions involving a change in shipments or funds that have been beforehand scheduled to go to Russia or Belarus, however that at the moment are going to a distinct nation;

• Transactions involving funds from entities in third-party international locations who will not be in any other case concerned with the transactions, the place the international locations are potential transshipment factors for exports to Russia and Belarus;

• Using enterprise checking or overseas alternate accounts by U.S.-based retailers concerned within the import and export of digital gear, the place the transactions are performed with third-country-based electronics and aerospace corporations with places of work in Russia or Belarus; and

• Transactions involving entities whose web site or enterprise registration states that the entities work on “particular function initiatives.”

The Joint Alert additional notes that the procurement of EAR99 gadgets—a class usually referring to low-tech client items that don’t require a license for export, re-export, or switch to most locations—could be a widespread tactic for evading BIS scrutiny.

As a result of many monetary establishments are concerned in offering financing or processing funds for export-related exercise, they might be uniquely outfitted to assist determine suspicious exercise. For instance, the Joint Alert notes that corporations that present financing to exporters might have entry to clients’ end-use certificates, export paperwork, or different extra in depth documentation related to letters of credit-based commerce financing.

Monetary establishments, particularly these instantly concerned in commerce finance, might want to evaluate their protocols for figuring out and reporting suspicious exercise in mild of this Joint Alert.

Particular because of Summer time Affiliate Miranda R. Carnes for her worthwhile contributions to this GT Alert. Not a licensed legal professional.