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Treasury Disrupts Russia’s Sanctions Evasion Schemes (Press Release)

Date issued: Jan. 15 2025

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Press Releases

Treasury Disrupts Russia’s Sanctions Evasion Schemes

January 15, 2025

Actions expose a secret payment channel for sensitive exports and target a Kyrgyzstani financial institution for supporting Russia’s military-industrial base

WASHINGTON — Today, the U.S. Department of the Treasury is moving against Russian efforts to evade U.S. sanctions. This action targets a sanctions evasion scheme established between actors in Russia and the People’s Republic of China (PRC) to facilitate cross-border payments for sensitive goods. In addition, Treasury is designating a Kyrgyz Republic-based financial institution that coordinated with Russian officials and a U.S.-designated bank to implement a sanctions evasion scheme.

Treasury is also reinforcing the grave risks foreign persons face in continuing to work with Russia’s military-industrial complex by re-designating pursuant to Executive Order (E.O.) 13662 almost 100 entities already designated pursuant to E.O. 14024....

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TURBOFAC Commentary (261 words)

Notes:

1) This press release marks the first ever designation based on the FFI “secondary sanctions” provision at section 11 of EO 14024, as amended by EO 14114. Notwithstanding the extremely broad scope of the provision (“conducted or facilitated any significant transaction or transactions, or provided any service, involving [a person blocked pursuant to EO 14024]”), the Keremet Bank designation is based on conduct that is egregious enough that it might have been the subject of a standard “materially assists” designation action but for the existence of section 11 of EO 14024 (i.e. material support provided to PSB in the form of facilitating “cross-border transfers on PSB’s behalf” as part of a “sanctions evasion scheme”. This is, notably, one of a very small handful of pure “secondary sanctions” enforcement actions against FFIs under any sanctions program, not just...