FinCEN and BIS: FIs must watch out for Russian diversion attempts
The Financial Crimes Enforcement Network (‘FinCEN’) and US Department of Commerce’s Bureau of Industry and Security (‘BIS’) have issued what they describe as ‘a joint alert to financial institutions, advising them to be vigilant against efforts by individuals or entities to evade BIS export controls implemented in connection with the Russian Federation’s further invasion of Ukraine.’
The alert notes that there are a number of ways in which a financial institution can review aspects of export-related financial activity, and thus be able to spot evasion efforts. These include where, ‘
- Its customer (exporter) receives a letter of credit from its customer (the importer),
- The financial institution issues a line of credit to its customer (exporter) to facilitate the transaction, or
- The importer’s wire transfer payment for the export is received by the exporter’s financial institution or handled as part of a correspondent banking transaction.’
It said that BIS had identified particular commodities ‘presenting special concern because of their potential diversion to and end use by Russia and Belarus to further their military and defense capabilities,’ amongst which are aircraft parts and equipment, antennae, breathing systems, cameras, GPS systems, sonar systems and other items.
FinCEN acting director, Himamauli Das said, ‘By identifying and reporting suspicious activity indicative of such behavior, financial institutions contribute to U.S. and international efforts to degrade Russia’s military capabilities, apply economic pressure, and end the war in Ukraine.’ https://www.fincen.gov/sites/default/files/2022-06/FinCEN%20and%20Bis%20Joint%20Alert%20FINAL.pdf
