They open and close shell companies around the world. They change routes, logistics and financing methods to ship military, dual-use and economic commodities while evading detection. Our investigations must be agile and action-oriented to disrupt them.

But they rely on trusted networks, often involving people and businesses with a track record of sanctions circumvention, or close links to security and intelligence services, which we can identify. Identifying networks and network types will have a greater impact than targeting any single person or shell company, solving the “whack-a-mole” problem.

UN and other multilateral trade sanctions regimes already place obligations on financial services providers, though they are often overlooked. US, UK and EU authorities threaten repercussions on banks for processing payments or financing for Russian export control evasion. However, banks and other regulated entities often lack compliance mechanisms to detect trade sanctions violations. Their data does not contain sufficient detail to screen transactions against sanctioned goods lists. They are accustomed to screening for sanctioned people and companies: their most effective detection mechanisms use intelligence-driven client and counterparty analysis. They need to convert illicit commodities into red flags about entities. This is what SECTA’s typologies do.

Sanctioned goods are increasingly procured in, and shipped through, jurisdictions where regulations are not enforced. However, the need to pay legitimate suppliers means that payment and financing for them must often still pass through the formal financial system, via financial institutions in jurisdictions with the legal frameworks and political will for enforcement. Given the right information and analysis, banks and other financial services providers could drive the detection and disruption of trade sanctions evasion networks.

Our acronym SECTA and our newsletters refer to both sanctions evasion and circumvention. Sanctions evasion is a deliberate attempt by an entity subject to sanctions or trade restrictions to bypass those laws. It is illegal - like an EU-based company deliberately shipping dual-use goods to Russia, or deliberately mis-declaring goods on exports. Sanctions circumvention is bypassing sanctions by re-routing goods through countries where no sanctions apply. Sanctions circumvention is not necessarily illegal, although it may be criminalized in some jurisdictions. In some cases, financial or other professional support for sanctions circumvention may also be illegal.

Sanctioning bodies, regulators, investigators and professional services firms have all shared lists of red flags that companies can use while conducting due diligence to identify potential customers or transactions of concern. These are valuable when conducting general risk analyses, but they often produce large numbers of false positives. Banks, in particular, report that they may have thousands or even millions of false positives if they use these general red flags for a screening system.

Our typologies are different. We are not trying to share all of the ways people evade sanctions. We are sharing the characteristics of a single network or type of evasion/circumvention actor. The searches we suggest should result in a manageable number of responsive hits - a few, maybe dozens. Not millions.

Because our experts come from both government and private sectors, we understand time is limited. We target our reporting to different sectors' needs.

We try to email only when we have new information to share. We send typology newsletters once per month. We may also send occasional updates, such as information about events or webinars where we will be represented. We will not email every day or even every week.

We would be happy for you to contact us with questions or feedback on our alerts. While we send just one typology per month, we constantly review and investigate new ways that sanctions evasion and circumvention networks operate. If you have information you'd like to share or feedback on our materials, please get in touch. If you want more information on a network or typology we have shared, we would be glad to discuss that as well.