Banks providing or handling payments supported by letters of credit (L/Cs) are amongst financial institutions that the US' Financial Crimes Enforcement Network (FinCEN) and the US department of commerce's Bureau of Industry and Security (BIS) are urging to be vigilant against efforts by individuals or entities to evade national export controls implemented in connection with Russia and Belarus.

A joint alert issued by FinCEN and the BIS says that by identifying and reporting suspicious activity indicative of sanctions evasion, US institutions financial institutions are contributing to US and international efforts to degrade Russia's military capabilities, apply economic pressure, and end the war in Ukraine.

Export controls

Since Russia invaded Ukraine in February, BIS has implemented a series of stringent export controls that restrict Russia's access to the technologies and other items that it needs to sustain its invasion of Ukraine.

These controls target Russia's defence, aerospace, and maritime sectors, and have been expanded to Russia's oil refining, industrial, and commercial sectors, as well as to luxury goods used by Russian elites. BIS's controls have also been applied to Belarus for its substantial enabling of Russia's invasion.

Risk-based screening

The joint FinCEN and BIS alert provides financial institutions with an overview of BIS's export restrictions to date, a list of certain commodities of concern, and other information they can use and incorporate into their risk-based screening of financial transactions.

The alert also provides select transactional and behavioural red flag indicators of export control evasion, including red flags derived from recent Bank Secrecy Act reporting

The FinCEN and BIS joint alert can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.