OFAC targets Russia’s sanctions evasion network

It’s been a year since Russia launched its invasion of Ukraine.  During that time, the Treasury Department’s Office of Foreign Assets Control (OFAC) has implemented sweeping sanctions, export controls and other measures against Russia.  This includes adding more than 2,500 targets to the SDN List and sanctioning 80% of Russian banks.

Now, OFAC is targeting those who are trying to evade the sanctions.  Earlier this month, the Treasury Department imposed full blocking sanctions against 22 individuals and entities who are part of a global network designed to support Russia’s military-industrial complex.  That network – known collectively as the “Zimenkov network” – consists of front companies, persons and other entities who attempt to funnel money and arms to support Russia’s invasion of Ukraine.  Its lead by Igor Zimenkov, a Russia- and Cyprus-based arms dealer.

According to OFAC, Zimenkov and others have been involved in direct discussions with sanctioned Russian defense firms, enabled Russian defense sales to third-party countries and supplied Russia with controlled technology devices.  Some of the companies and individuals named as part of this network include:

• Asia Trading & Construction PTE Limited: Along with its director (Serena Bee Lin Ng) this shell company sold Russian helicopters to a country in Latin America;
• Texel F.C.G. Technology 2100 Limited: Texel and its CEO, Marks Blats, have funneled money to Asia Trading and provided a Russian company with electro-optical and other infrared devices;
• Elektrooptika SIA: Another company owned by Blats;
• GBD Limited: Attempted to sell Russian weapons systems to an African country and also sent millions of dollars to Zimenkov over the years;

This is just a partial list of the entities and persons identified by OFAC as being part of the Zimenkov network.  The implications of these new sanctions mean:

• All property and interests in property of the designated persons that are in the United States or controlled by U.S. persons are blocked and must be reported to OFAC;
• Any entity owned (directly or indirectly) 50 percent or more by one of the blocked persons is also blocked;
• All transactions by U.S. persons or within (or transiting) the United States that involve any property of blocked persons are prohibited unless approved by OFAC;
• The includes the provision of funds, goods, or services by, to, or for the benefit of any blocked person.

“Russia’s desperate attempts to utilize proxies to circumvent U.S. sanctions demonstrate that sanctions have made it much harder and costlier for Russia’s military-industrial complex to re-supply Putin’s war machine,” said Deputy Secretary of the Treasury Wally Adeyemo.  “Targeting proxies is one of many steps that Treasury and our coalition of partners have taken, and continue to take, to tighten sanctions enforcement against Russia’s defense sector, its benefactors, and its supporters.”

You can read the full details of these new sanctions in the Treasury Department press release here.