Case Study: How FiveBy Helped Uncover Sanctions Evasion in Crimea

Client Challenge

Following the 2014 U.S. embargo on Crimea, multinational companies faced the risk of violating sanctions due to resellers using sophisticated methods to hide their activities. Automated compliance systems often failed to detect these tactics, resulting in potential fines and reputational damage.

The FiveBy Solution

FiveBy, a risk intelligence firm, has utilized its human-driven analysis to identify six key methods of sanctions evasion by entities linked to Crimea. These methods were discovered through thorough research of Russian public tenders, government databases, and corporate records.

Key Findings and Methodologies Detected

1

False Registration Locations

Companies registered in Russia but primarily operating in Crimea.

2

Shared Leadership Across Multiple Entities

Individuals managing multiple companies used one to mask the activities of another.

3

Business Activity Mismatch

Companies registered under unrelated business activities to avoid scrutiny.

4

Vague Product Descriptions

Tenders used generic terms to hide the sale of embargoed U.S. goods.

5

Open Tender Participation Without Licenses

Entities bidding on tenders for U.S. goods without proper authorization.

6

Ambiguous Customer Address Information

Incomplete or vague addresses to obscure end-user locations.

FiveBy’s insights enable clients to:

Avoid Regulatory Penalties

by identifying high-risk resellers before transactions occurred.

Strengthen Compliance Programs

by integrating human-led analysis with existing automated tools.

Enhance Due Diligence

through targeted investigations into ownership and business activities.

Conclusion

This case underscores the limitations of automation in sanctions compliance and the critical role of expert human analysis. FiveBy’s tailored, intelligence-driven approach empowered clients to detect and prevent sanctions violations that would have otherwise gone unnoticed.

About FiveBy Solutions

Global leaders trust FiveBy to transform complexity into opportunity. We combine AI and human expertise to overcome regulatory, operational, and cultural barriers, accelerating growth and ensuring compliance for businesses worldwide.

One comment

  1. F1 says:

    The article highlights the crucial role of human analysis in sanctions compliance, showing how automated systems fall short. FiveBys detailed methods reveal sophisticated evasion tactics, offering valuable insights for businesses aiming to avoid penalties and strengthen their compliance programs.

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