Sanctions cause major problems to Russia and its entities that try to bypass them

International sanctions have caused major challenges to Russia’s energy, industrial, military, and financial sectors. A lack of Western goods, equipment, and components has caused operational difficulties for Russian companies. According to available intelligence, Russian citizens and businesses seek to organise sanction evasion schemes to obtain the needed critical equipment or export the production that is under sanctions. Their priority is to secure the supply of dual-use goods and equipment. Attempts to circumvent the sanctions involve EU-based companies, mostly those that have developed trade relationships with Russia and Belarus and provided them with Western goods and equipment.

Most common methods to evade export control and the sanctions regime are declaration of goods with the customs using misleading codes and descriptions, thus concealing the true purpose of the goods and concealing the end-users with a help of a long chain of intermediaries.

Russian individuals and legal persons under sanctions are interested in opportunities and methods of transferring funds, establishing shell companies in third countries, evading restrictions on money transfers, and restructuring their businesses by concealing the ultimate beneficial owner.

Russia tries to restrict public information about individuals and legal persons associated with the Kremlin, their companies, and assets. The Kremlin highly likely will continue to exercise control over such information and restrict access to the information about the sanctioned Russian citizens and legal persons even further.

Sanctioned Russian individuals and legal persons often organise transfer of their businesses to third persons or family members, make fake business sale deals and / or rename their companies. Business and financial management consultants, both companies and private individuals, who assist the entities in trying to circumvent the sanctions are not merely risking the reputation of their own or of the state where they operate but also may be held legally liable.