Mission to Cajole Porous Border States

Top Treasury Department officials took a two-week journey through Central Europe and Central Asia to garner support for measures countering Russia's evasion of sanctions imposed due to the ongoing war in Ukraine.

Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence,  visited Central Europe, while Elizabeth Rosenberg, Assistant Secretary for Terrorist Financing and Financial Crimes,  headed to Central Asia.

The two officials used their trips to foster closer collaboration, information sharing, and discussions on trade trends and enforcement priorities throughout the supply chain.

The Treasury Department notes that Russia is actively attempting to bypass sanctions imposed by a coalition of more than 30 countries. In partnership with the Commerce Department and other US government departments and agencies, as well as international coalition partners, the Treasury Department is presenting businesses with a clear choice: maintain connections to the global economy or support Russia's war and lose access to the world's most crucial markets.

During his Central Europe visit, Mr. Nelson met with government officials, financial institutions, businesses with exposure to Russia, and key industry stakeholders. Addressing a group of business leaders at the American Chamber of Commerce Austria Roundtable,  Mr. Nelson highlighted the success of the sanctions and export controls.  

He assured the audience that business considerations were taken into the sanctions regime.  Collaboration between the private sector and government authorities was encouraged, “ We need to hear from you about what your firms are seeing in this space, and how you are managing the overlapping sanctions evasion risks, money laundering and fraud risks, and export controls requirements,” he said.

Mr. Nelson acknowledged concerns about the impact of sanctions on profits: “While we support increased scrutiny, we also want to ensure that jurisdictions are not subject to unnecessary de-risking, which could have significant unintended economic and financial consequences, especially in smaller jurisdictions.”

Meanwhile, in Central Asia, Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg travelled with counterparts from the European Union, the United Kingdom, and the Commerce Department, to Kazakhstan to discuss the evasion of sanctions and export controls imposed on Russia for its war against Ukraine.

Ms. Rosenberg and Assistant Secretary for Export Enforcement Matthew Axelrod joined an interagency, multilateral visit to Astana and Almaty from April 23 to 26. They were part of a delegation that included the European Union's International Special Envoy for the Implementation of EU Sanctions, David O'Sullivan, and the United Kingdom's Director of the Sanctions Directorate, David Reed.

The delegations met with government officials and the private sector to share information, outline strategic priorities, and offer assistance to help facilitate compliance while minimizing economic impacts on Kazakhstan.

Russia's efforts to illicitly procure supplies and inputs for its military-industrial complex were discussed, with a focus on dual-use goods. The delegations urged vigilance against an uptick in evasion attempts and warned that Russia has sought to use cut-outs, opaque payments, and third countries to circumvent sanctions and export controls.

Assistant Secretary Axelrod stressed the urgency of preventing Russia from evading coalition export restrictions by transshipping specific semiconductors and other electronic integrated circuits through Kazakhstan to power its missiles and drones.

Assistant Secretary Rosenberg outlined sanctions evasion typologies in the financial sector and shared that the United States enjoys strong partnership and open communication with the Government of Kazakhstan. Both officials expressed the desire to be good partners to government and industry in their efforts to ensure they are not used to support the Russian war effort.

The visit aimed to provide clarity across sanctions and export control regimes and offer technical assistance to Kazakhstan.