Using geospatial tracking to shut down sanctions violators

A heavy equipment manufacturer sells its products globally. One of its distributors in Turkey finds that some of its equipment, including tractors, is making its way across the border into Syria for day-contract work in exchange for cash, off the books, and thus violating sanctions compliance. First, the perpetrators hover along the border and sneak across in the morning, paying a bribe to border patrol agents to get across. Then they do a day’s worth of construction work in Syria (building whatever it may be, possibly something sinister such as trenches or defense barriers), after which they truck the equipment back home to Turkey before anyone at “corporate” notices.

Policies, training and due diligence checks were completed and certified by the distributor and their employees. But sneaking equipment across the border for day work and then returning it back in the evening is a lucrative affair, so bad actors are tempted to commit these sanctions violations regardless. While fictional, this is just one example of how companies are increasingly exposed to sanctions risks in a world where the line between corporate crime and geopolitics is becoming blurrier as the U.S. uses its economic clout to clamp down on terrorists and weaken Russia in its invasion of Ukraine.

In one high-profile case, U.S. law enforcement caught executives at multinational cement company Lafarge S.A. paying terrorist groups like ISIS millions of dollars in exchange for permission to operate a cement plant in Syria. (See “Inside the Lafarge Sanctions Violation Case,” by Thorsten J. Gorny, Sanctions.io, Nov. 11, 2022.)

Sanction evasion cases such as these have become a top priority for U.S. law enforcement officials investigating white-collar crime. U.S. Deputy Attorney General Lisa Monaco has called sanctions enforcement the new Foreign Corrupt Practices Act (FCPA), the 1977 law that forbids U.S. citizens and organizations from bribing foreign officials. (See Career Connection column.)

“Across the department and indeed across the globe, we are handling corporate investigations that involve sanctions evasion — in industries as varied as transportation, fintech, banking, defense and agriculture,” said Monaco in a speech earlier this year. She added that the DOJ is bringing in 25 new prosecutors to investigate and prosecute sanctions evasion, export control violations and similar economic crimes. (See “Deputy Attorney General Lisa Monaco Delivers Remarks at American Bar Association National Institute on White Collar Crime,” Department of Justice, March 2, 2023.)