FinCEN and the Bureau of Industry and Security (BIS) Issue Joint Notice and New Key Term for Reporting Evasion of U.S. Export Controls Globally

The Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) have issued a joint notice to inform financial institutions of a new „key term“ to be used in SAR Field 2 when filing suspicious activity reports (SARs) in relation to „potential efforts by individuals or entities seeking to evade U.S. export controls NOT related to Russia’s invasion of Ukraine“. Specifically, in such case, institutions should note „FIN-2023-GLOBALEXPORT” in their reports, instead of „FIN-2022-RUSSIABIS”, which shall be used only for possible evasion of Russian export control restrictions.
Furthermore, the agencies provide a number of red flags that may indicate an attempt to evade U.S. trade and other export restrictions, including the following, among others:
– transactions involve entities with little or no presence on the internet;
– the party to a transaction does not engage in business the payment is designated for;
– the country code of customers‘ phone numbers do not match the country code of a transaction destination;
– account holders‘ names or addresses are very similar to those of sanctioned parties; or
– the transaction value does not match the value of the good the transaction is made for.
Finally, the notice provides further guidance to institutions as to other reporting obligations they may be subject to, such as the reporting of cash transaction exceeding $10,000 in relation to a trade or business. In such case, institutions need to use Form 8300 to report on such transactions. Voluntary reporting for amounts under $10,000 is also possible. The guidance on such filings is provided in the last part of the notice, beginning on page 6.