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Russia Sanctions-Trade Sanctions Circumvention

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The Russia sanctions aim to discourage actions that harm Ukraine’s stability and territorial integrity. Trade sanctions deny Russia access to goods and revenue for its illegal war. Due diligence is crucial as Russia may seek restricted goods through alternative routes, posing trade displacement and diversion risks. Traders must consider these risks and conduct strong due diligence on counterparties. The procurement cycle involves international suppliers, intermediaries, cover/front companies, and the true end-user. Risk indicators include involvement in restricted goods, connections to concerning countries, and use of complex structures. Product-related indicators encompass transactions involving sanctioned or sensitive goods, misleading descriptions, and abnormal trade patterns. Country/jurisdiction-related indicators involve active engagement with sanctioned countries, suspicious shipment routes, and weak export control laws. These indicators should guide tailored due diligence and internal governance. Such risks can be identified through customer, product, and location factors. It is crucial to be vigilant and gather complete information, considering potential discrepancies, fraudulent documentation, and vague details from customers and vendors.