Anonymous tipsters angry with Russia are helping the fingers of sanctions

Never before have a western economy sanctions have increased in such quantities. Since the invasion of Ukraine on February 24, entities linked to Russia have been hit more than organizations around the world in the previous decade, said Paul Feldberg, a partner in the London branch of law firm Jenner & Block. Big money is at stake. In 2014, America was fined bnp Paribas Bank received nearly $ 9 billion for violating sanctions against Cuba, Iran and Sudan. But governments are striving enforce sanctions, and companies that try to stay on the right side of them find the job damn hard. Many of the Russian subjects subject to sanctions are much larger, more complex and more deeply embedded in global business networks than previous targets, for example, in IranMyanmar, North Korea, Syria and Venezuela.

Another problem is that America and its allies have imposed numerous “narrative” or “notable” sanctions that apply not only to quoted entities but also to thickets of unidentified shadowy entities. That’s why labyrinthine business structures need to be carefully mapped, says Christopher Stringham, a lawyer in Vienna with Refinitiv, a data processing firm that does just such mapping to help customers avoid large fines. He tells the story of a London company that his team identified as part of a Russian energy firm affected by the sanctions. Searches in state registers went “on the sand.” However, in the end, the team found on the ninth page of the Russian-language prospectus, inaccessible to search in databases, a hidden link to certain debt instruments issued by the London firm on behalf of the Russian company. That was enough for the British company to qualify as a subsidiary of the company subject to sanctions.

Mr Stringham believes that with a little more effort the subsidiary could be hiding “completely under the radar”. The Russian government seems to be trying to help firms and oligarchs in this. For years, Russian authorities have tolerated corporate statements with false intentions to circumvent Western sanctions, he says. In recent weeks, Russia has also sharply restricted access to corporate registries and reduced the publication of data on energy production and trade. Instead of struggling with the reliability of the information, Mr Stringham says, “right now we just don’t have access”.

Relevant information disappears in other ways. Many Russian companies and tycoons have hastily sold or transferred assets such as ships and shares to entities that are unlikely to be subject to sanctions. These transactions may look legitimate. In many cases, however, legal documents have been prepared to retain control of the original owner. And, says Alexander Dmitrenko, an expert on Russia and Ukraine in the Tokyo office of law firm Ashurst, “this document is not visible.”

Given the possibilities for deception, it might seem that the deck is made for the benefit of those seeking to evade sanctions. But investigators trying to identify sanctions fraudsters – against government agencies, pressure groups, insurers and other businesses – are facing an influx of help from the unexpected. Russia’s attacks on Ukrainian civilians have caused widespread outrage, in large part because of the flow of shocking images on social media. As a result, people who see business relations with Russia have begun to slowly reveal details of deals they suspect are improper.

It takes time to enforce law enforcement, and these are the first days. But consider the experience of Bellingcat, a brigade in Amsterdam. Hristo Grozov, Bellingcat’s leading investigative journalist on Russia-related matters, says the horror of the Kremlin’s war is forcing people to turn to clues about Russia’s offenses. Someone working in Russia for a Paris-based company recently sent in Bellingcat internal documents showing that a consignment of alleged humanitarian goods actually contained clothing for Russian soldiers. To protect the identity of the employee, Bellingcat is working to prove the offense by other means. It received recordings of telephone conversations between the Russian Ministry of Defense and an organization affiliated with the Paris firm.

New Bellingcat informants are taking a greater risk than has been taken before, probably because the war in Russia is generating such disgust. According to Mr. Grozev, “employment security is taking a back seat.” If the fighting continues, he expects good advice from inside Russia to multiply.

Oil leaks

One of the units that saw the opportunity to cultivate new sources of information at the earliest stage is the Russian tanker tracking team (rttg). Hastily assembled by the Ukrainian government after the invasion rttg serves as a hub for exchanging advice from people familiar with the Russian oil trade, from crew members to foreign officials, says Oleg Ustenko, one of the rttgleaders. Mr. Ustenko, who is also an economic adviser to Ukrainian President Volodymyr Zelensky, says rttgThe network of unpaid informants in Russia has grown with the exposure of Russian war crimes.

Even though about rttgInformants’ Mr. Ustenko describes many as “ordinary people.” Legions of Ukrainians, he said, work on ships. (The International Chamber of Shipping, a sectoral body, recently counted 76,442 Ukrainian sailors.) “They can be a good source,” he notes. Mr. Ustenko, who works in Ukraine from unidentified places, boasts that rttg has such detailed information that often knows the breakdown of the nationalities of the crew for a given dispersal of an oil tanker.

The rttg shares advice with Ukrainian and foreign authorities. But since much of Russia’s oil trade remains legal rttg also publishes supply information in hopes of causing political and consumer pressure. The stench from the association with Russia has forced some insurers and Western energy companies to limit their involvement in what Louis Wilson of Global Witness, a pressure group that works with rttg, called “blood oil”. Similarly, stories of multinational companies still doing business with Russia are multiplied in the Ukrainian press and then spread by Ukrainian public relations firms in publications around the world.

Russia has stopped publishing monthly trade. But The Economist Russia’s imports are estimated to have fallen by about 44% since it invaded Ukraine, while its exports have grown by about 8%, in part because Russia earns about $ 1 billion a day from oil and gas sales. Although it is not known to what extent the banned trade is conducted, it is assumed that the Russians are particularly keen to import industrial equipment; advanced semiconductors; parts for aircraft and rockets and spacecraft; components for radio communications, as well as luxury items such as cars and jewelry. It is believed that Russian companies are trying to illegally export wood products, seafood and liqueur.

Because trade is so decentralized and diffuse, through closed shipping containers or in the form of commodities, an informal global network of low-cost or voluntary spies can be of particular value in detecting smugglers. Samir Madani is a co-founder of TankerTrackers, a firm with analysts in London and Stockholm. Most of the information analyzed by his team comes from people who pay to photograph tankers in and around ports (the draft shows how much oil is on board). But TankerTrackers also gets tips for free from employees. The information sometimes contains photos of falsified shipping documents. Scoops are usually sent to a “vodka” smartphone that TankerTrackers keeps in its offices in Stockholm, where Mr Madani works.

Previously, such advice usually came from sailors and port workers who are tired of the dictatorship under which they live. Advice on defrauding Iran of sanctions – Mr Madani calls it a “wholesale bump” – has risen since Ebrahim Raisi, a hardliner, was elected president last June. As Venezuela’s economy fell to a new low a few years ago, disclosure of illegal oil supplies by the regime to support the Cuban government began to grow. Mr Madani is expecting more messages from Russian workers now that Putin has moved “into a full dictatorial regime”.

Demonstrative experience of the Ukrainian intelligence firm Molfar, which has about 35 analysts in Kiev and the Dnieper. Since the end of February, she has been approached by about ten employees of Russian payment companies who betrayed the efforts of their employers to evade sanctions. Molfar passed information to the information organization, ain.Capital, which on May 3 published on Facebook a list of 47 companies suspected of illegally moving money to and from Russia. After the details were released, one of the firms called “cheat service”, the payment company Bankoff, announced to its users that Visa and Stripe had informed it that the Bankoff Card services had been suspended due to a large number of active users. and transactions from Russia. “

Some speakers are motivated by anger at Russia because of rising prices for basic products such as gasoline and grain, says Ian Ralby, CEO with ir Consilium, a consulting company focusing on maritime security and crime. ir The Consilium advocates a “whole society” approach to maritime intelligence gathering; included his customers natoThe U.S. Department of Defense and the Oceania Customs Organization, a Fiji-based body that helps 23 member countries and territories improve customs operations.

The rewards for fraud can be great. The chartering manager in London, who wished to remain anonymous, said that companies that illegally buy Russian goods receive discounts of up to 30%. Perhaps unsurprisingly, the ship’s broker’s brokerage company sees more and more ships turning off their transponders – devices that transmit the ship’s position, course and speed – long enough to dive into and out of Russian ports. Another sign of malware is that less details are published about many transactions. In recent weeks, a Russian shipping agent in St. Petersburg has begun sending London brokerage information about vessels violating Western sanctions, including by turning off transponders to reach St. Petersburg. In exchange, the informant can count on nice deals if the brokerage company resumes business with Russia.

The London broker keeps the information to himself, leaving competitors to risk fines. For its part, TankerTrackers sells its information to customers, including banks and insurers, who sometimes cut off funding or insurance for a suspected infringer. Lawyers of such outfits regularly turn to TankerTrackers to declare their innocence. It shows them the evidence, Mr Madani says, “and then they shut up”.

The potential of this special intelligence network has not gone unnoticed by the Central Intelligence Agency of America. Earlier this month, Facebook, Instagram and YouTube required the publication of instructions in Russian to securely send tips. The Russian regime and its campaigns may, in the end, prove to be more ongoing than sanctions. ■