US Justice Department to audit hedge funds and law firms to combat sanctions circumvention

The US Department of Justice, when looking for accomplices in circumventing sanctions, will pay attention to investment advisers, hedge funds, law firms and private wealth managers, which were previously not affected by the checks. About it informed in an interview with Bloomberg, the head of the US Department of Justice working group on the implementation of sanctions against Russia, Andrew Adams.

According to him, the department will shift its focus to checking “intermediaries” in circumvention of sanctions. These are bankers, money managers, hedge fund managers and private equity firms, Adams said. He noted that banks in the US and Western Europe comply with the restrictions, but “there are places in the world where such a culture does not exist.”

The working group also plans to explore the use of cryptocurrencies to mask transactions related to products that have been sanctioned, or to make payments to Russian businessmen and companies that have also been affected by the restrictions. In addition, the US Department of Justice has developed a number of new secret tactics to identify companies and individuals that hide the assets of sanctioned Russians.

Against the backdrop of the start of Russia’s special operation in Ukraine, the United States and a number of other countries imposed large-scale sanctions against the Russian Federation, which affected many sectors of the economy, including energy, the high-tech sector, aviation, the banking industry, the mining industry, the automotive industry, etc.

In March 2023, the US Treasury introduced recommendations on combating circumvention of anti-Russian sanctions for US financial institutions and companies involved in foreign trade. In particular, companies were advised to pay attention to the use of shell companies, refusal to share information about the ultimate purpose of using products, shipping goods through China and jurisdictions close to Russia, etc.