OFAC has issued an Advisory on the circumvention of US sanctions against Crimea pursuant to Executive Order 13685, which prohibit all transactions and trade with the region involving a US person or the United States. The intention of the Advisory is to highlight some of the practices that have been used to circumvent the US sanctions regime and to assist US persons in implementing controls to ensure compliance.
The evasive practices identified by OFAC typically involve the omission or obfuscation of references to Crimea in documentation underlying transactions involving US persons or the United States. In the context of financial transactions, OFAC has become aware of people and entities repeatedly omitting the originator or beneficiary address information from SWIFT messages involving persons ordinarily resident or located in Crimea. Where international trade is concerned, Crimean counterparties on financial and trade documents have been listed as being located in Russia rather than in Ukraine.
OFAC advises caution when processing payments lacking complete address information when such transactions involve persons that have previously omitted this information in respect of Crimean people and entities, and warns that when dealing with third-country companies they may be unaware of US sanctions on Crimea or intentionally exploit confusion over the situation to sell US products to Crimean persons. The Advisory goes on to recommend that compliance programs monitor for search terms corresponding to major geographic locations within Crimea, and not only references to “Crimea”, that additional information is requested from parties that have previously violated or attempted to violate US sanctions, and that US sanctions obligations are clearly communicated to international partners. OFAC adds that these are only examples, and that parties should always tailor specific compliance measures to their own risk profile.