The U.S. Department of the Treasury has taken decisive action to disrupt Russia’s covert sanctions evasion networks, targeting financial systems and international enablers that support Russia’s military-industrial complex. These measures aim to curtail funding for Russia’s war efforts in Ukraine and reinforce global compliance with U.S. sanctions.
Introduction
The Treasury Department has exposed an elaborate sanctions evasion network involving Russian and Chinese entities and a Kyrgyzstani financial institution. Announced on January 15, 2025, this action targets channels facilitating cross-border payments and highlights the risks of supporting Russia’s military operations.
Russia’s Sanctions Evasion Network
Covert Payment Channels
Russia, with support from the People’s Republic of China (PRC), has developed regional clearing platforms (RCPs) to facilitate cross-border payments for sensitive goods. These platforms circumvent international sanctions by allowing non-cash settlements for transactions involving restricted items.
Entities Involved:
- Russian RCPs: Herbarium Office Management LLC, Sigma Partners, and others.
- Chinese RCPs: Anhui Hongsheng International Trade Co., Qingdao Hezhi Business Service Co., and others.
These networks enable the Kremlin to procure essential materials for its military while bypassing established restrictions.
Keremet Bank: A Sanctions Evasion Hub
A Key Player in Kyrgyzstan
Keremet Bank, based in the Kyrgyz Republic, has been identified as a critical node in Russia’s sanctions evasion schemes. Since mid-2024, the bank has facilitated cross-border transfers on behalf of U.S.-sanctioned Russian institutions, including Promsvyazbank.
Highlights:
- Acquisition by Russian Interests: In 2024, Keremet Bank’s controlling stake was purchased by a firm tied to a Russian oligarch.
- Financial Role: The bank’s activities include processing payments for Russian imports and exports, effectively enabling sanctioned transactions.
The U.S. Treasury has designated Keremet Bank under Executive Order 14024 for its role in supporting Russia’s military operations.
Expanding Secondary Sanctions
To further isolate Russia, the Treasury has expanded mandatory secondary sanctions targeting critical sectors of Russia’s economy:
- Financial Services: Major banks like Sberbank and Gazprombank.
- Energy: Companies facilitating revenue generation from energy exports.
- Defense: Entities supplying materials for Russia’s military-industrial base.
These measures aim to deter foreign entities from engaging with Russian organizations and emphasize the financial risks of non-compliance.
RUSSIAN FINANCIAL SERVICES SECTOR
| Entity Name | Type |
|---|---|
| Bank Saint-Petersburg | Russian Bank |
| Bank Zenit | Russian Bank |
| Credit Bank of Moscow | Russian Bank |
| Eximbank of Russia | Russian Bank |
| Gas Industry Insurance Company Sogaz | Russian Insurance Company |
| Gazprombank | Russian Bank |
| International Investment Bank | Russian Bank |
| Joint Stock Commercial Bank AK Bars | Russian Bank |
| Joint Stock Commercial Bank Novikombank | Russian Bank |
| Joint Stock Commercial Bank Primorye | Russian Bank |
| Joint Stock Company Alfa-Bank | Russian Bank |
| Joint Stock Company Avtovaz | Russia-based Carmaker |
| Joint Stock Company Bank Dom RF | Russian Bank |
| Joint Stock Company Post Bank | Russian Bank |
| Joint Stock Company Russian National Reinsurance Company | Russian Reinsurance Company |
| Joint Stock Company State Transportation Leasing Company | Russia-based Entity |
| Moscow Exchange | Russian Financial Market Access |
| National Clearing Center | Russian Clearing House |
| National Payment Card System | Russian Payment System |
| Non-bank Credit Institution Joint Stock Company National Settlement Depository | Russian Financial Infrastructure |
| Obshchestvo S Ogranichennoi Otvetstvennostyu Holdingovaya Kompaniya Yuesem | Russian Holding Company |
| Promsvyazbank | Russian Bank |
| Public Joint Stock Company Bank Uralsib | Russian Bank |
| Public Joint Stock Company MTS Bank | Russian Bank |
| Public Joint Stock Company PIK Specialized Homebuilder | Russia-based Mortgage Services |
| Public Joint Stock Company Rosbank | Russian Bank |
| Public Joint Stock Company Sberbank of Russia | Russian Bank |
| Public Joint Stock Company SPB Bank | Russian Bank |
| Public Joint Stock Company Transkapitalbank | Russian Bank |
| SDM-Bank | Russian Bank |
| Sistema Public Joint Stock Financial Corporation | Russian Investment Holding Company |
| Sovcombank | Russian Bank |
| SPB Exchange | Russian Investment Products |
| State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank | Russian National Economic Development Institution |
| Russian Direct Investment Fund | Russian Sovereign Wealth Fund |
| T-Bank (formerly Tinkoff Bank) | Russian Bank |
| Transmashholding JSC | Russia-based Financial Companies Owner |
| VTB Bank | Russian Bank |
RUSSIAN DEFENSE AND RELATED MATERIEL SECTOR
| Entity Name | Type |
|---|---|
| Aktsionernoe Obshchestvo Rusgazdobycha | Natural Gas Extraction |
| Joint Stock Company Gazstroyprom | Oil and Gas Construction |
| Joint Stock Company Polimetall | Wholesale Fuel, Petroleum Support |
| Joint Stock Company Razrez Kolyvanskiy | Russian Coal Mining |
| Joint Stock Company Ugolnaya Kompaniya Kuzbassrazrezugol | Russian Coal Mining |
| Limited Liability Company Machine Building Plant Tonar | Coal Transportation Vehicles |
| Limited Liability Company Shipbuilding Complex Zvezda | Shipbuilding, LNG Carriers |
| Public Joint Stock Company Pipe Metallurgical Company | Energy Sector Products, Hydrogen Energy |
| Public Joint Stock Company Severstal | LNG Storage, Renewable Energy |
| Publichnoe Aktsionernoe Obshchestvo Mechel | Russian Coal Mining |
| Publichnoe Aktsionernoe Obshchestvo Raspadskaya | Russian Coal Mining |
| Velesstroi Limited Liability Company | Oil, Gas, Electric Power Construction |
| Arktik SPG 1 | Artificial Plot Construction, Cargo Terminal |
| Limited Liability Company Obsky Gas Chemical Complex | Gas Wells Development |
| OOO Gazprom Invest | Gas Industry Facilities Design, Construction |
| Regent Baltica Company Limited | Cryogenic Isothermal Panels |
| Limited Liability Company Arctic LNG 2 | LNG Project Management |
| Joint Stock Company United Metallurgical Company | Steel Pipes Manufacturing |
| JSC Suek | Coal, Heat, Electricity Production |
| Open Joint Stock Company Tikhoretsk Machine Construction Plant VV Vorovsky | Power Line Installation Products |
Broader Implications
These actions highlight the Treasury’s commitment to exposing and disrupting networks that enable Russia’s war efforts. By targeting financial and logistical enablers, the U.S. aims to reduce Russia’s access to critical resources while reinforcing the integrity of international sanctions.
Foreign entities must recognize the heightened risks of supporting Russia’s military-industrial complex. Compliance with U.S. sanctions is essential to avoid severe penalties.
In Conclusion
The Treasury’s actions against Russia’s sanctions evasion schemes send a clear message: circumventing sanctions will not be tolerated.
By exposing covert networks and targeting enablers, the U.S. strengthens its position against global threats. To stay informed on the latest Treasury measures, visit Treasury’s Office of Foreign Assets Control.
Sources: THX News & US Department of the Treasury.
