Sanctions and Evasion Updates: Insights from OCCRP
At OCCRP, we strive to shed light on the pressing issues surrounding sanctions and sanctions evasion. We are excited to share the latest stories from OCCRP and its partners, along with our efforts at the Global Anti-Corruption Consortium (GACC) to amplify their impact.
Key Themes from Our Reporting
Recent reporting exposed how:
- Cyprus is a key nexus jurisdiction
- Goods transit through Russia’s neighbors: Belarus and Georgia
- Western components keep flowing into Russian weapons
A Cyprus Intermediary
Together with OCCRP, our partners from the Belarusian Investigative Center (BIC), Schemes (Ukraine), and Belsat (Belarus), uncovered how a mysterious Cyprus-based company with ties to a former Belarusian official is being paid millions of euros by the Belarusian government to facilitate its trade in potash through Russia’s port. Other major media also took up the story.
GACC in action: EU authorities followed up on this case quickly. GACC partner State Capture: Research and Action filed a submission related to this company with EU and Cyprus authorities, expanding on the investigation’s findings. Our Cypriot reporting partner CIReN confirmed that the European Commission has contacted Cypriot authorities over these allegations.
Opaque Cyprus Funds
Cyprus pops up often in OCCRP stories about sanctioned individuals obscuring their wealth. One investigation from September showed how a Cyprus law firm marketed “registered alternative investment funds” (RAIFs) as a way to avoid disclosing asset ownership, after an EU crackdown on corporate secrecy. Two megayachts and multiple properties linked to sanctioned Russian state banker Andrei Kostin were hidden behind such funds.
GACC in action: The anti-corruption community and others took notice of the issue of using secretive funds to avoid disclosing luxury assets in Cyprus after the investigation was published. Transparency International posted: “… It’s hard to understand why governments & global standard-setters haven’t been paying closer attention & implementing measures to clamp down on risks posed by these funds.”
The Belarus Gap
Recent OCCRP reporting also focused on addressing the so-called “Belarus Gap” — the discrepancy between sanctions imposed on Russia compared to Belarus. One investigation exposed a “false transit” scheme that routes sanctioned goods through two of Russia’s neighbors, Kazakhstan and Belarus. Another uncovered how wood from Russia and Belarus still finds its way into Europe, even after the EU banned these imports in March 2022, with Belarusian and Russian wood companies submitting paperwork that claimed their shipments came from Kazakhstan and Kyrgyzstan. Moreover, OCCRP member center BIC published several
GACC in action: Civil society groups drew on OCCRP reporting in their calls to the EU to harmonize restrictive measures between Belarus and Russia, to help thwart sanction avoidance schemes such as those revealed by OCCRP and its partners. GACC partners also called for extending sanctions to the proxies of Belarusian oligarchs. In June, the Council of the EU took action, adopting stronger sanctions, including bans on the export of dual-use goods and the import of several commodities, and anti-circumvention measures such as the prospect of sanctioning proxies.
Georgian Trade Flows, Estonia Too
Tackling another key border, OCCRP member center iFact examined how Georgia facilitates Russia’s military supply chain. Findings based on the analysis of trade data show how drones, computer processors, GPS devices, memory cards, and many other dual-use goods transit through Georgia to Russia. Delfi, another OCCRP partner, reported on how factories in Estonia are producing dual-use goods and exporting them to Russia.
Western Military Goods Still Flowing
Did you think that Western weapons stopped going to Russia awhile ago? Think again. Recent investigations discovered how some Italian, Czech, and other Europe-produced weapons continue to reach the Russian market. Stories from our Ukrainian partners — TrapAgressor media and Slidstvo.info — revealed a different route of Western weapons components from the EU to Russia, and discovered how some German companies have supplied Russian weapons manufacturers. Our Russian member center iStories revealed how Russian companies still access some of the latest Western technologies and how companies, while technically complying with sanctions, don’t want to pay too much attention to where their products may end up.
Not All Russia
To shed light on possible gaps in an entirely different sanctions regime, OCCRP and its partners at SIRAJ went undercover to show how trucks manufactured in Sweden and other EU states find their way to Syria through neighboring countries. Video evidence showed the Syrian military using these trucks as its devastating civil war rages on. The story was picked up by the Swedish media and Swedish politicians are now calling for the EU to review its sanctions policy on Syria, arguing, “We don’t think any European truck company wants blood on their hands.” Convening Allies
Along with following up on OCCRP reporting, the GACC team works to bring together different groups concerned with sanction evasion. In June, we organized a workshop on “Investigating Trade Sanction Evasion” on the sidelines of the International Anti-Corruption Conference (IACC) in Lithuania. Forty journalists and civil society experts from 12 countries spent the day exchanging expertise on data sources, future trends, legal technicalities, and other topics of shared concern. Our IACC panel, “Feeding The Russian War Machine: Lessons Learned from Investigating Cross-Border Sanction Evasion,” featured five journalists from the OCCRP network, presenting on investigative tactics and findings, as well as how secrecy, politics, and corruption are impeding enforcement.
Stay tuned for another update early next year. Please contact GACC if you’d like to discuss these stories or partnering to expose sanctions evasion.
Article Credit: https://gacc.occrp.org/post/sanctions-and-evasion-updates