The Department of Justice announced Oct. 31 that three individuals have been charged in connection with a global procurement scheme that violated U.S. export controls and economic sanctions by shipping defense-related equipment to sanctioned Russian entities. The DOJ noted that some of these items have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.
The DOJ alleges that the defendants received orders from Russian end-users in the defense and technology sectors that sought to acquire particular dual-use electronic items or parts from the U.S. Knowing these items had potential military application, the defendants communicated directly with U.S. manufacturers and distributors (typically using aliases), purchased the goods from them using two shell companies, and arranged for the goods to be sent to various locations in New York. The defendants then then unlawfully shipped the goods to a variety of intermediary corporations in other countries, including Turkey, Hong Kong, India, China, and the United Arab Emirates, where they were rerouted to Russia. Over the course of a year more than 300 shipments of restricted items valued at approximately $10 million were shipped in this way.
According to the DOJ, this case was pursued through the Disruptive Technology Strike Force – which is co-led by the departments of Justice and Commerce and is designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states – and Task Force KleptoCapture, an interagency entity dedicated to enforcing the sanctions, export restrictions, and economic countermeasures the U.S. and others have imposed against Russia in response to its war against Ukraine.
For more information on the wide range of trade restrictions the U.S. has imposed on Russia and how to ensure your company is in compliance, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.
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