RegRally Insights: Sanctions Essentials

ECOVIS PrventusLaw welcomes you to its monthly newsletter on Sanctions, which is dedicated to everyone who wants to understand the latest trends and developments, get tips from our experts, and deepen their knowledge.

FICIS 2023 Report Highlights Evasion Trends and Sanctions Breaches

On 30 May 2024, the Anti-Money Laundering Board of FICIS released its 2023 Activity Report, noting sophisticated schemes to evade international sanctions. Analysis revealed Lithuanian traders shifting to new partners in third countries post-sanctions on Russia and Belarus. In 2023, FICIS imposed fines totalling EUR 15,750 for 11 breaches of international sanctions. Download the report.

To ensure compliance and avoid involvement in such schemes, financial market participants should consider the following recommendations:

Enhance AML and Sanctions Screening Procedures
Conduct Thorough Due Diligence
Monitor Financial Transactions Closely
Report Suspicious Activities Promptly

OFAC Sanctions Ecuador’s Los Lobos Drug Trafficking Organization

On 6 June 2024, OFAC sanctioned the Ecuador-based Los Lobos drug trafficking organisation and its leader, Wilmer Geovanny Chavarria Barre (“Pipo”). Los Lobos, Ecuador’s largest drug trafficking group with thousands of members, significantly contributes to the country’s violence. Read more.

Russian Court Seizes €51.8 Million from German Bank LBBW

On 7 June 2024, a Russian court ordered the seizure of €51.8 million from Landesbank Baden-Württemberg (LBBW) over a cancelled gas project. LBBW, a guarantor for the German company Linde’s contract to build a gas plant in Russia, faced asset seizure after the project was halted due to Western sanctions. This follows similar asset seizures from UniCredit, Deutsche Bank, and Commerzbank. Read more.

Ridderkerk Residents Arrested for Violating Sanctions on Russian Timber

On June 4, a 73-year-old man and a 46-year-old woman from Ridderkerk were arrested for violating sanctions by purchasing and importing Russian timber via Chinese suppliers. Two companies’ directors and managers are accused of circumventing trade restrictions. Authorities searched their homes and businesses, seizing administration, bank accounts, and timber stock. Read more.

Dual U.S.-Russian Citizen Pleads Guilty to Illegal Export of Firearm Parts

Dimitry Timashev, a dual U.S.-Russian citizen, pleaded guilty to conspiring to violate the Export Control Reform Act by exporting firearm parts to Russia without authorisation from July 2020 to 2023. He coordinated with a Russian associate, who paid his daughter’s tuition and rent in exchange for the exports, which were rerouted through Kazakhstan after the Russian invasion of Ukraine. Timashev faces up to five years in prison, with sentencing set for November 8. Read more.

Lithuania Enforces Financial Sanctions on Entities Linked to Russia and Belarus

Under Council Regulation (EU) No 269/2014, Lithuania has frozen over €23 million in the accounts of 11 entities linked to Russian actions against Ukraine. Additional sanctions under Regulation (EC) No 765/2006 target Belarusian entities, freezing €23.4 million and $7.68 million. Total incoming frozen funds tied to EU sanctions exceed €1.342 million. Read more.

US Treasury Sanctions Individuals and Entities Involved in Illicit Oil Trade

On June 10, 2024, the US Treasury’s OFAC sanctioned ten individuals, entities, and ships involved in the illicit movement of oil and commodities, including the network of Houthi financial middleman Sa’id al-Jamal. This marks the seventh round of sanctions against the Sa’id al-Jamal network since October 2023, demonstrating the US’s commitment to disrupting the financing of transnational terrorist groups like the Houthis. Read more.

EU Adopts 14th Package of Sanctions Against Russia

The EU Council has adopted its 14th package of sanctions against Russia, targeting high-value sectors such as energy, finance, and trade. These measures aim to weaken further Putin’s regime and those perpetuating the war against Ukraine. The package includes restrictions on 116 individuals and entities undermining Ukraine’s sovereignty.

Key measures include:

1. Non-Liability Clause: EU operators are not protected from liability if they fail to conduct due diligence regarding EU sanctions.

2. Circumvention: Participation in activities that could circumvent sanctions is punishable, even if the person accepts the possibility of such outcomes.

3. Finance: Russia’s SPFS financial messaging system is outlawed, and EU entities are barred from transactions with listed entities using SPFS outside Russia. Additionally, transactions with targeted financial institutions and crypto providers supporting Russia’s defense are banned.