News / US Justice Department cracks down on sanctions-busting

Forwarders are among those recently charged by US authorities with breaching sanctions on Russia by sending illegal exports of military and reconnaissance equipment.

In the past month, four US dual-nationals, a resident of India and a Ukrainian national have been caught up in a US Department of Justice (DOJ) crackdown on flows of prohibited goods into Russia, the most recent discovered on Monday.

The DOJ said US/Russian citizen Sergey Nechaev had been arrested on charges relating to the unlawful export of two “small aircraft” to Russia.

It claimed: “According to the indictment, between 3-24 March 2023, Nechaev engaged in a scheme to violate and evade US export control laws and regulations by attempting to smuggle two Cessnas from the US to Russia by transhipping them through Armenia.

“To conceal the true end user and destination, Nechaev falsely represented that the end user and destination were in Armenia.”

Transhipping into Russia has become de rigueur for those trying to evade sanctions, sources noting in some cases such schemes are “blatantly obvious”, with goods for national infrastructure bound for countries that don’t have it.

Sources have also cited other countries in Central Asia and the Caucasus as among the favourite transhipment routes for smugglers.

Others arrested or sentenced in the past 30 days for breaching sanctions related to Russia and beyond inc;ude US nationals Oleg Nayandin and Vitaliy Borisenko, held for smuggling dual-use technologies for purported use in, among other things, Russian suicide drones.

The pair are accused of using their freight forwarding operation to tranship parts via Finland, Kazakhstan, and Turkey between March 2022 and June 2023, in violation of the Export Control Reform Act.

The DOJ alleges they smuggled some $6.4m of controlled technologies over the 15-month period – if convicted, they face up to 20 years in jail.

Assistant secretary for export enforcement Matthew Axelrod said: “This company allegedly used not one, not two, but three different schemes to illegally tranship sensitive American technology to Russia.”

“This a prime example of our work to bring to justice both companies and corporate executives alleged to have circumvented our rules in search of a fatter bottom line.”

There appears to have been a marked uptick in DoJ efforts to crack down on the issue – on Tuesday, that included the arrest of someone smuggling goods to North Korea. Shenghua Wen, a Chinese national living in California apparently without a visa, was arrested on allegations that he had exported firearms and military items to the republic.

At the end of November, founder of a California-based forwarder, Richard Shih plead guilty to conspiring to violate export laws by shipping to Chinese companies on the US Department of Commerce’s entity list.

Mr Shih had been repeatedly informed that the companies, all aliases for one firm known as Seajet, were on the list, but continued to trade with them.

At the time of press, the DOJ  had yet to respond to requests for comment from The Loadstar, but sources said that there appeared to have been a notable increase in activity surrounding exports of aerospace equipment out of Florida.

One source claimed that more than $500m in aerospace spare parts had been smuggled into Russia out of Miami in 2023 alone.

They told The Loadstar: “And it continues today, unabated. There is a huge amount of aircraft spares going from MIA daily, Boeing and Airbus spares. There are multiple companies – suppliers, forwarders, airlines – all turning a blind eye in the name of profit.

“US Customs has to be aware of it going to Dubai, Turkey, Kazakhstan, Uzbekistan – all being used for trading dual-use and sanctioned goods.”