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G7 Takes Aim at Russia’s Sanctions Evasion Tactics with New Measures!

Russian oil tanker in a harbor at night
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The G7 finance ministers pledge new actions to counter Russian sanctions evasion, particularly in response to oil price cap violations and the use of shadow fleets. This meeting follows ongoing concerns over Russia’s tactics to circumvent financial restrictions. According to the U.S. OFAC, Russian financial institutions have developed a network of foreign subsidiaries to facilitate the purchase or sale of sanctioned goods.

Key Points:

  • Commitment: G7 finance ministers and central banks reaffirmed efforts to curb Russia’s sanctions evasion, especially regarding oil exports.
  • Shadow Fleet Targeted: Additional measures will aim to raise costs for Russia’s shadow tanker fleet, which aids in sanctions evasion by transferring oil at sea.
  • Financial Measures: G7 to intensify restrictions on financial institutions supporting Russia’s evasion networks via foreign subsidiaries.
  • Loan to Ukraine: G7 also announced a $50 billion loan for Ukraine, with repayment from Russian assets seized after February 2022.

Short Narrative:

At a recent summit in Washington, G7 finance ministers doubled down on enforcing sanctions against Russia, particularly targeting violations of the oil price cap agreement. Since December 2022, G7, the EU, and Australia have imposed a cap to limit Russia’s oil revenue without disrupting global markets. However, some countries continue purchasing Russian oil above this cap, and a network of unmarked “shadow tankers” enables covert oil transfers. The G7 intends to impose additional costs on this shadow fleet and prevent financial institutions from aiding Russia’s sanctions evasions. In a supportive gesture, the G7 also approved a $50 billion loan to Ukraine, to be repaid from frozen Russian assets.

Actionable Insight:

This development underscores the need for global financial institutions to stay vigilant against compliance risks tied to Russian subsidiaries or shadow fleet activities. Heightened monitoring and transparency initiatives can help prevent indirect facilitation of sanctions breaches.

Call for Information:

Have insights on sanctions evasion methods or financial networks tied to Russia? Reach out to FinTelegram as we continue to spotlight global compliance efforts against economic crimes.

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