Exporters should be aware that the financial institutions that facilitate their shipments are being asked to take an expanded role in helping to identify the evasion of all export controls, not just those associated with Russia.
The Bureau of Industry and Security and the Treasury Department’s Financial Crimes Enforcement Network have previously issued two notices to help financial institutions identify the potential evasion of U.S. controls on exports to Russia. The first listed nearly two dozen red flags and a number of commodities of particular concern. The second detailed evasion typologies, highlighted nine high-priority HTS numbers to inform due diligence, and identified additional transactional and behavioral red flags.
Building on the success of those alerts in generating suspicious activity reports, BIS and FinCEN issued Nov. 6 a notice highlighting a new key term (FIN-2023-GLOBALEXPORT) for financial institutions to reference when submitting SARs on potential efforts by individuals or entities seeking to evade U.S. export controls not related to Russia’s invasion of Ukraine. The notice also highlights red flag indicators of export control evasion, with a focus on advanced and critical technologies, that can help exporters (as well as financial institutions) in their due diligence efforts.
BIS states that it leverages SARs to investigate violations of U.S. export control regulations. Investigations involving advanced technologies (e.g., advanced semiconductors, quantum, hypersonics) sought by nation-state adversaries to support military modernization efforts designed to overcome U.S. military superiority, or mass surveillance programs that enable human rights abuses, are being prioritized and worked through the interagency Disruptive Technology Strike Force, co-led by BIS and the Department of Justice.
For more information U.S. export controls 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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