U.S. temporary suspension of export privileges of “Russian procurement network”

Unauthorized export of items subject to EAR

Unauthorized export of items subject to EAR

The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce today issued a release announcing a temporary denial order immediately suspending export privileges of three persons and two companies for 180 days for the unauthorized export of sensitive items subject to the Export Administration Regulations (EAR) to Russia.


As explained in the BIS release [PDF 123 KB]:

  • The respondents were allegedly affiliated with Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector.
  • The Moscow-based companies operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were allegedly used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.
  • This network began operations prior to Russia’s invasion of Ukraine and sought to obtain and divert items that had previously been subject to stringent U.S. export controls.
  • The respondents unlawfully purchased and exported sensitive components, some of which can be used in military applications. Specifically, a Russian national allegedly attempted to evade export controls by creating shell companies and associated bank accounts in the United States, to route shipments and layer financial transactions to obscure the true Russian end users.
  • The respondents are alleged to have used this network to purchase and export highly sensitive and heavily regulated electronic components, including advanced semiconductors, for the Russian military, defense sector, and research institutions.

For more information on sanctions and other responses to Russia’s war on Ukraine, visit KPMG’s dedicated website.

Contact a professional with KPMG’s Trade & Customs services:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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