In the Tri-Seal Compliance Note U.S. enforcement agencies stress the aim to squash third‐party intermediaries used to evade Russia‐related sanctions and export controls. This is said to be one of the most common tactics Russia is using to help “disguise their involvement” the agencies said. The note—from the Bureau of Industry and Security (BIS), Treasury’s Office of Foreign Assets Control (OFAC) and Justice departments—outlines other methods Russia uses to circumvent trade restrictions, including through intermediaries or transshipment points, and describes a range of red flags businesses should monitor.
Matthew Olsen, Assistant Attorney General for National Security, said in a statement that the guidance is meant to “convey the Department’s expectations as to national-security related corporate compliance.” It will be “incumbent upon industry to maintain effective, risk-based compliance programs,” said Matthew Axelrod, Commerce’s top export enforcement official. Some of the key elements in an effective export compliance program include a risk assessment, internal controls, testing, auditing and training.
What You Can Do
Manufacturers, distributors, resellers, and freight forwarders are who the agencies consider to be in “the best position to determine if a transaction or a customer’s activity is consistent with industry norms and practices” and are warned to exercise heighted caution and due diligence if they suspect any red flags.
The agencies said companies need to be “vigilant in their compliance efforts” and “act responsibly” to avoid aiding Russia, adding that the U.S. won’t “hesitate” to pursue prosecutions. Without “rigorous compliance controls,” companies and “their business partners risk being the targets of regulatory action, administrative enforcement action, or criminal investigation.” If you have questions about the Tri-Seal Compliance Note, reach out to Mohawk Global Trade Advisors.
By Clarissa Chiclana