Blog > Navigating Russia Sanctions in 2024: Key AML Compliance Considerations

14th June 2024

Navigating Russia Sanctions in 2024: Key AML Compliance Considerations

When Russia invaded Ukraine in February 2022, Western countries coordinated to deploy an unprecedented package of economic sanctions against Vladmir Putin’s regime, targeting hundreds of individuals and businesses, and comprising asset freezes and wide-ranging prohibitions on imports and exports. 

The Russia sanctions regulations changed the global risk landscape almost overnight and in response, firms moved quickly to review and adjust their sanctions screening solutions to avoid costly compliance penalties. The sanctions challenge became more complex in 2022 and 2023 as global governments issued subsequent rounds of sanctions and enforcement regulations, broadening the scope of existing measures, and increasing penalties for violations.  

In 2024, Russia sanctions remain a compliance priority, and firms need to be capable of deploying an effective screening response. To help your organisation navigate the sanctions landscape effectively, let’s take a look at the latest global developments. 

Recent Global Sanctions Against Russia

On 22 February 2024, the UK imposed its latest sanctions package against Russia, with 50 new sanctions targeting individuals and entities involved in the manufacture of munitions and tools for Russian military end-use, and in the Russian diamond trade. 

On 23 February 2024, the EU and the US also announced new Russia sanctions. Its 13th package against Russia since the invasion began, the EU’s sanctions imposed new restrictions against 106 individuals and 88 entities. The EU measures targeted Russia’s military and defence industries, but extended to companies in China and Turkey which trade in electronic components for Russian end-use. The US imposed 500 new sanctions, targeting some of Russia’s largest financial services, mining, and manufacturing businesses, including the National Payment Card System, the Avangard Joint Stock Bank, and JSC Bank ChelindBank. 

On 1 May 2024, the US announced 300 new sanctions against Russia. The sanctions were intended “to limit the Kremlin’s revenue and access to the materiel it needs to prosecute its illegal war against Ukraine”. To that end, the sanctions target the Russian energy, metal, and mining industries, Russia’s ability to develop biological and chemical weapons, and Russian business partners in third countries. 

Russia Sanctions Regulations: US, EU and UK Developments

United States

Sanctions Evasion: In September 2023, the US’ Financial Crimes Enforcement Network (FinCEN) published a Financial Trend Analysis (FTA) on Russian sanctions evasion. The FTA was based on suspicious activity report (SAR) data submitted by US financial institutions, amounting to a value of around $1 billion. In the analysis, FinCEN highlighted the following sanctions evasion trends:

  • The supply of prohibited goods directly from US companies to Russian end-users, or via transhipment through intermediaries in the UK, the Middle East and Asia. 
  • A reliance on businesses in China, Hong Kong, the United Arab Emirates (UAE) and Turkey in sanctions evasion strategies. 
  • The prominence of electronic equipment, including “microelectronic components, imaging technology, electronic filters, and electromechanical instrumentation” in sanctions-violating trading activity. 
  • The emergence of other industries, such as industrial machinery and professional services, in the violation of Russian sanctions. 

Secondary Sanctions: In January 2024, President Biden announced that the US would be imposing new secondary sanctions on Russia, targeting non-US banks that provide sanctioned Russian customers with certain services. The secondary sanctions focused primarily on services in support of Russian military end-users. 

European Union

Extension of Sanctions: On 12 March 2024, the EU Council voted to extend its existing sanctions against Russia for another six months, to 15 September 2024. The move came 10 days before the EU’s 13th sanctions package (see above). The EU Parliament also announced an increased focus on Russia sanctions compliance with stronger penalties against persons attempting to evade sanctions, including prison terms of up to 5 years for trade with, or provision of, services to Russia. 

Targeting Propaganda: Following the extension of existing sanctions and introduction of new sanctions, the EU announced that it would be imposing a 14th round of sanctions on Russia  in the coming months. As part of that announcement, the EU indicated it would be targeting Russian propaganda by banning the broadcasting activities of four Russian state media outlets: Voice of Europe, RIA Novosti, Izvestiya, and Rossiyskaya Gazeta. 

United Kingdom

Sanctions Strategy: On 22 February 2024, the UK government published the UK Sanctions Strategy in conjunction with the announcement of its latest round of Russia sanctions. The Strategy sets out the UK government’s “approach to using sanctions to address global threats, promote international norms and protect the UK”, including details of measures to “disrupt Russia’s war-machine”. 

Sanctions Evasion: Like the EU and the US, the UK Strategy signalled an increased focus on Russia sanctions compliance and attempts by the Russian government to bypass economic sanctions. The Strategy included the following key details:

  • UK officials are travelling to states in Central Asia, Eastern Europe and the Gulf “to share concerns and build relationships” in the fight against Russia sanctions evasion. 
  • The UK is tackling Russia sanctions evasion in part by targeting illicit finance streams, including complex corporate structures and shell companies that are used “deliberately to obscure the ownership of assets”. 
  • UK efforts include sharing a list of items “critical to Russia’s battlefield capacity” with third parties, and “calling their attention to any spikes in the trade of sanctioned goods – and on how to strengthen enforcement.”
  • The UK is making a greater effort to identify and designate persons that are involved in “military procurement networks and third country supply and assistance to Russia”. 

As part of the Strategy, the UK government announced new restrictions on persons designated on sanctions lists, making it illegal for them to sit on company boards. The Strategy also indicated that the UK would be exploring legal mechanisms to release frozen Russian assets for the specific purpose of rebuilding and reconstruction in Ukraine. 

Russia Sanctions Compliance: What’s Next?

With the EU’s 14th package of Russia sanctions on the horizon, sanctions compliance will continue to have a significant impact on financial services for the foreseeable future, and firms must be ready to move quickly as the global risk landscape changes. That challenge means adopting a hyper-vigilant approach to sanctions screening, and emphasising flexibility and accuracy in sanctions screening solutions.  

Effective, accurate global sanctions screening involves capturing and analysing vast amounts of data. To that end, firms should find an automated screening solution that meets their business needs and fits the risk environment. Ripjar’s Labyrinth Screening platform is designed to help firms keep pace with the complexity of global sanctions compliance, while streamlining the screening process itself. 

Labyrinth Screening offers firms the power to conduct real-time name searches of global sanctions lists and thousands of additional risk data sources from around the world. Powered by cutting-edge AI, Labyrinth includes AI Risk Profiles to help compliance teams extract the most relevant information about customers and build-out comprehensive, useful risk profiles. Labyrinth also includes AI Summaries, a cutting-edge, generative AI feature that adds short, concise prose descriptions of a customer’s AML risk to their profile. 

Discover how Labyrinth Screening can help you comply with Russia sanctions

Read more

Subscribe to Newsletter