U.K. authorities issued a red alert last week warning the financial sector of “common techniques” used by Russia to evade sanctions on the export of high-risk products that it's using in its war against Ukraine.
The alert, which was issued by several U.K. agencies, urged vigilance against the facilitation of exports or transactions involving the trade of high-priority items critical to Russian weapons systems and its military.
Despite the unprecedented sanctions put in place by the U.K. and other governments, Russia is “exerting significant effort” to obtain sanctioned goods from other countries, including products originating in the United Kingdom, the alert warns.
“Russia is deploying complex supply chains and alternative supply routes to acquire sanctioned products,” the advisory noted.
Some of the flags businesses should watch out for include transactions for high-risk goods from a company that was incorporated after the invasion of Ukraine; transactions involving customers with counterparties tied to a Russian military end user; and transactions involving companies that are co-located, or have shared ownership, with a sanctioned Russian entity.
“U.K. businesses should conduct due diligence to ensure that the end destination of these products is not Russia,” U.K. authorities said in the alert, adding that they’re also “working with third countries to tackle the flow of these goods to Russia.”
The U.K. government also announced last week new sanctions against 46 individuals and entities, including those that are supplying military equipment and parts to Russia.
The sanctions targeted businesses in Belarus, China, Serbia, Turkey, the UAE and Uzbekistan.
Sinno Electronics Co. Limited, a Chinese electronics trading company, was among the entities sanctioned for providing goods to Russia.
The company was sanctioned last year by the U.S. Department of the Treasury for providing financial and technological support to Radioavtomatika, a U.S.-designated Russian firm that has been supplying “foreign items for Russia’s defense industry.”
An in-depth investigation shows how companies like Sinno Electronics that are located in key transshipment countries often display a number of the red flags highlighted in the recent U.K. alert to circumvent trade sanctions.
According to registration records and corporate disclosures, Sinno Electronics shares the same address and office suite with several other electronic and technology companies, including entities like Yinke HK Electronics and Zeyuan Technology that have previously been sanctioned or added to the U.S. Bureau of Industry and Security’s (BIS) Entity List for supplying restricted items to Russian military end users.
In addition, Sinno Electronics’s owners and directors jointly co-own another Hong Kong-based technology trading company, Sigma Technology Limited, which has not been sanctioned. Prior to and following the invasion of Ukraine, Sigma shipped semiconductors and electronic goods to sanctioned Russian military end users, according to customs and trade records.
The alert, which was issued by several U.K. agencies, urged vigilance against the facilitation of exports or transactions involving the trade of high-priority items critical to Russian weapons systems and its military.
Despite the unprecedented sanctions put in place by the U.K. and other governments, Russia is “exerting significant effort” to obtain sanctioned goods from other countries, including products originating in the United Kingdom, the alert warns.
“Russia is deploying complex supply chains and alternative supply routes to acquire sanctioned products,” the advisory noted.
Indicators of Suspicious Activity
The U.K. authorities provided a list of 14 red flags that the financial sector should take into account as indicators of illicit or suspicious activity associated with potential sanctions and trade evasion.Some of the flags businesses should watch out for include transactions for high-risk goods from a company that was incorporated after the invasion of Ukraine; transactions involving customers with counterparties tied to a Russian military end user; and transactions involving companies that are co-located, or have shared ownership, with a sanctioned Russian entity.
“U.K. businesses should conduct due diligence to ensure that the end destination of these products is not Russia,” U.K. authorities said in the alert, adding that they’re also “working with third countries to tackle the flow of these goods to Russia.”
The U.K. government also announced last week new sanctions against 46 individuals and entities, including those that are supplying military equipment and parts to Russia.
The sanctions targeted businesses in Belarus, China, Serbia, Turkey, the UAE and Uzbekistan.
Sinno Electronics Co. Limited, a Chinese electronics trading company, was among the entities sanctioned for providing goods to Russia.
The company was sanctioned last year by the U.S. Department of the Treasury for providing financial and technological support to Radioavtomatika, a U.S.-designated Russian firm that has been supplying “foreign items for Russia’s defense industry.”
An in-depth investigation shows how companies like Sinno Electronics that are located in key transshipment countries often display a number of the red flags highlighted in the recent U.K. alert to circumvent trade sanctions.
According to registration records and corporate disclosures, Sinno Electronics shares the same address and office suite with several other electronic and technology companies, including entities like Yinke HK Electronics and Zeyuan Technology that have previously been sanctioned or added to the U.S. Bureau of Industry and Security’s (BIS) Entity List for supplying restricted items to Russian military end users.
In addition, Sinno Electronics’s owners and directors jointly co-own another Hong Kong-based technology trading company, Sigma Technology Limited, which has not been sanctioned. Prior to and following the invasion of Ukraine, Sigma shipped semiconductors and electronic goods to sanctioned Russian military end users, according to customs and trade records.
Kharon users can explore the Sinno Electronics procurement network in the Kharon ClearView platform. Click here to explore.
The U.K.’s red alert and sanctions were announced the same week that G7 leaders issued a statement reinforcing their commitment to prevent Russia from evading sanctions and export controls.
“Our commitment remains to restrict exports of all items critical to Russia’s military and industrial base, including those used on the battlefield and we call on third parties to take equivalent action,” the leaders said in a Dec. 6 statement.
The U.K.’s red alert and sanctions were announced the same week that G7 leaders issued a statement reinforcing their commitment to prevent Russia from evading sanctions and export controls.
“Our commitment remains to restrict exports of all items critical to Russia’s military and industrial base, including those used on the battlefield and we call on third parties to take equivalent action,” the leaders said in a Dec. 6 statement.
