European companies were made aware of the issue of circumvention exports to Russia and Belarus at the latest with the EU Commission's communication in Official Journal C145l of 01 April 2022. In the communication, the EU recommends hedging measures.
Many reliable exporters adjusted their contracts and work with so-called red flags to identify implausible or critical end uses and diversions (diversion risk) and safeguard themselves through in-depth due diligence and end use checks. In addition to the destinations of the Eurasian Economic Union (EAEU, consisting of the Russian Federation and the Republic of Belarus, the Republic of Armenia, the Republic of Kazakhstan as well as the Kyrgyz Republic) mentioned in the Commission document, deliveries to other states bordering the EU, which have not imposed their own embargo measures against the Russian Federation, are to be examined with particular attention in light of possible circumvention transactions.
The U.S. Financial Crimes Enforcement Network (FinCEN), together with the U.S. Department of Commerce's Bureau of Industry and Security, also issued a joint alert to the export and financial industries on 28 June 2022, recommending that they be particularly vigilant against attempts by individuals or companies to circumvent export controls against the Russian Federation.
Included is an overview of current US export restrictions, a list of items that the US has identified as being particularly relevant for circumvention transactions, and selected transaction and behavioural red flags to help identify transactions related to possible export control circumvention. The document is also of interest to European exporters - not only for re-exports of US goods, but also to integrate the Red Flag Indicators into their own ICP (Internal Compliance Programs). More info...
Links:
Quellen:
U.S. Financial Crimes Enforcement Network (FinCEN)
U.S. Department of Commerce's Bureau of Industry and Security (BIS)