11 December 2023
The National Crime Agency (NCA) has issued a warning that Russia is attempting to circumvent sanctions by purchasing UK good and services through intermediary countries.
Payroll services can be a key financial service that could be targeted by such activity. In the warning document, issued jointly with other agencies, 14 red flags are identified. Note that activity showing a red flag does not necessarily indicate illegal activity is taking place but can raise suspicions and prompt to investigate further.
The 14 flags identified are:
- Transactions related to payments for goods on the Common High Priority list, from a company incorporated after 24 February 2022 and based in known diversionary destinations.
- A customer who lacks or refuses to provide details on banks, shippers, or third parties, including about end users, intended end-use, or company ownership.
- Transactions involving smaller value payments, all from the same end user’s foreign bank account, to multiple, similar suppliers of Common High Priority list items.
- A customer that significantly overpays for a Common High Priority list item, compared to known market prices.
- Purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user. In addition, supporting documents, such as a commercial invoice, do not list the actual end-user.
- Transactions involving entities with little to no web presence, such as a website or a domain[1]based email account.
- Transactions involving customers with phone numbers with country codes that do not match the destination country.
- The item or service (commodity, software, service or technology) does not fit the purchaser’s line of business.
- The customer’s name or its address is similar to one of the parties on the OFSI consolidated list.
- Transactions involve a purported civil end-user, but research indicates customers with counterparties with connections with the military, such as an address that is a military facility or is co-located with military facilities in a country of concern.
- Transactions involving companies that are physically co-located, or have shared ownership, with an entity on the OFSI consolidated list.
- Transactions that use open accounts/open lines of credit when the payment services are conducted in conjunction with known diversionary destinations.
- Transactions involving a last-minute change in payment routing that was previously scheduled from a country of concern, but now routed through a different country or company.
- Transactions involving payments being made from entities located at known transhipment points or involve atypical shipping routes to reach a destination.
The NCA are on hand to assist if you have any specific queries about a situation.
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