Surprise! People are trying to evade the Crimean sanctions (from Executive Order 13685) from OFAC by omitting or oscuring references to Crimea. OFAC has issued an advisory highlighting the practices it has noticed, including:
In the context of financial transactions, OFAC has become aware that certain individuals or entitieshave engaged in a pattern or practice of repeatedly omitting originator or beneficiary addressinformation from Society for Worldwide Interbank Financial Telecommunications (SWIFT)messages involving individuals ordinarily resident in, or entities located in, Crimea (collectively,”Crimean individuals or entities”). Some SWIFT messages omit all originator or beneficiary addressinformation while other payment messages contain only partial address information for Crimeanindividuals or entities, including, for example, a street address but no reference to a town, city,region, or country. Financial institutions have discovered the data missing from these SWIFTmessages through enhanced due diligence efforts performed on one of the transaction parties afteridentifying a suspicious Crimea-related pattern or practice.
OFAC has also included a section of controls that firms should have in place to stay compliant with the very general Crimean sanctions, including:
- Ensuring that transaction monitoring systems include appropriate search terms correspondingto major geographic locations in Crimea and not simply references to “Crimea.” Forexample, payment instructions or trade documents may reference major cities or ports locatedin Crimea, and interdiction filters may not flag such transactions for review if the filters donot include an appropriately expansive list of search terms.
- Requesting additional information from parties (including financial institutions, corporateentities, and individuals) that previously have violated or attempted to violate U.S. sanctionson Crimea. Such prior conduct could include, for example, routing transactions to or throughU.S. financial institutions with inaccurate or incomplete address information for Crimeanindividuals or entities.
- Clearly communicating U.S. sanctions obligations to international partners (in both thefinancial and trade sectors) and discussing OFAC sanctions compliance expectations withcorrespondent banking and trade partners. Such communications should include, forexample, a description of the prohibition on the direct and indirect exportation orreexportation of goods, technology, and services (including financial services) from theUnited States to Crimea.
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