DOJ's Recent Russia Sanctions Enforcement Action Shows Greater Compliance Needed, Law Firm Says
DOJ's recent moves charging 11 individuals and various corporate entities for their roles in schemes to evade U.S. sanctions and export controls on Russia signal the government's continuing efforts to "aggressively enforce" restrictions on Russia, law firm Paul Weiss said in an analysis posted online Oct. 26. As a result, multilateral corporations with international supply chains need to ramp up compliance measures and be aware that international cooperation has expanded the reach of U.S. sanctions enforcement, the firm said.
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Earlier this month, the U.S. Attorney's offices for the Eastern District of New York and the District of Connecticut announced a bevy of charges on Russian individuals and entities for evading U.S. sanctions. In New York, DOJ charged five Russian nationals and two oil traders for their roles in a global procurement, smuggling and money laundering network (see 2210200021). In Connecticut, the agency charged a group of European nationals and entities with violating U.S. export laws by trying to ship a dual-use export-controlled jig grinder to Russia (see 2210200023). Both cases stemmed from the work of Task Force KleptoCapture -- an interagency group tasked with enforcing U.S. sanctions laws.
In response to the announcements, multinational corporations "should continually evaluate and update their compliance programs and carefully review interactions with higher-risk customers and counterparties, including those with connections to Russia and other high-risk jurisdiction," Paul Weiss said. Companies should review end-user agreements, the firm said, noting the defendants in the New York case falsely claimed certain entities were the end-users in the transactions. "Companies should consider revisiting, and if needed, strengthening, controls around end-user agreements in connection with business in higher-risk areas," the firm said.