UK Publishes Russia-Related Red Flags for Financial Services Sector
The U.K. government this week issued new guidance to alert the country’s financial services industry about ways Russia is using third countries to evade export controls and sanctions. The “red alert” also includes a list of red flags that banks, credit card operators, foreign exchange dealers and other payment service providers should monitor for potential Russian sanctions evasion, and the country’s National Crime Agency urged financial institutions to submit reports about any suspicious activity.
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The guidance, issued by the NCA, the U.K.’s Office of Financial Sanctions Implementation and other agencies, lists 14 red flags for payment service providers, including if a customer lacks or refuses to provide details about third parties involved in a transaction or information about end users, the intended end-use or company ownership. Other red flags include: a customer that significantly overpays for a good included on the list of common high priority items that Russia is seeking to import (see 2310020023); purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user; if transactions involve a “purported civil end-user” but research indicates customers with counterparties that have ties to the military; transactions involving payments from entities in “known transshipment points”; and more.