The US Treasury Department has warned that Russian financial institutions are evading sanctions by opening subsidiaries in third countries. Nations that maintain economic ties with Russia risk secondary sanctions if they allow Russian banks to open local branches for bilateral trade, according to the US Treasury’s Office of Foreign Assets Control (OFAC).
The Treasury Department aims to close the loopholes that Moscow is using to bypass existing sanctions. Russian authorities are allegedly using vague schemes to pay for dual-use goods imported from third states. The department urged caution when dealing with overseas branches or subsidiaries of Russian banks to prevent the establishment of new evasion channels.
Since the escalation of the Ukrainian conflict in February 2022, Washington has implemented multiple rounds of sanctions targeting foreign bank interactions with Russian entities. Last December, US President Joe Biden introduced secondary sanctions against financial institutions supporting Russia’s defense sector.
The US and its allies have imposed numerous restrictions against Moscow since 2014. Russia has criticized these sanctions as ineffective and harmful to US consumers and its partners in third countries. Share this story on social media to spread awareness about the issue.