The Financial Crimes Enforcement Network (FinCEN) and the Bureau of Industry and Security (BIS) within the U.S. Department of Commerce have issued a joint alert calling on financial institutions to proactively report potential attempts to evade U.S. export controls.

The advisory also serves as a reminder to all organizations involved in international trade to maintain a close and watchful eye on who they are doing business with.

This latest development occurs just months after the Five Eyes countries of the United States, the United Kingdom, Canada, Australia, and New Zealand strengthened their export control enforcement collaboration.

Key Messaging

  • FinCEN and BIS have introduced a new Suspicious Activity Report (SAR) key term, “FIN-2023-GLOBALEXPORT” to facilitate reporting of potential evasion of U.S. export controls.
  • The joint initiative aims to expand on existing measures to significantly reduce the risk of unauthorized entities, such as denied parties, acquiring controlled technologies.
  • It expands vigilance beyond possible Russia-related breaches to encompass global scenarios.

Detailed in a joint FinCEN/BIS press release, the alert introduces a new Suspicious Activity Report key term, “FIN-2023-GLOBALEXPORT” to allow for easy reporting of suspected U.S. export control violations. The measure expands the scope beyond incidents related solely to Russia sanctions. The Russia key term remains “FIN-2022-RUSSIABIS”.

This advisory empowers financial institutions with crucial insights and indicators to pinpoint transactions associated with the unlawful acquisition of items regulated by the Export Administration Regulations (EAR), including unauthorized access to advanced military and mass surveillance technologies.

Overview of U.S. Export Controls

U.S. export controls are integral to national security and foreign policy. The Export Control Reform Act of 2018 authorizes BIS to manage controls on dual-use and less sensitive munitions items through the EAR. These controls extend to the export, reexport, and transfer of items, including certain foreign-produced items. BIS evaluates controls based on technical specifications, intended end-use, or end-user, applying the Commerce Control List (CCL) to categorize items and determine licensing requirements. 

What is FinCEN?

FinCEN is the acronym for Financial Crimes Enforcement Network. It operates within the U.S. Department of the Treasury and is tasked with monitoring and analyzing financial transactions for law enforcement purposes. FinCEN's global mandate encompasses export control enforcement, necessitating collaboration with U.S. government agencies, international counterparts, and related global bodies.

Pivotal Components of the FinCEN/BIS Export Control Alert

  1. Introduction of SAR Key Term: The introduction of the SAR key term, “FIN-2023-GLOBALEXPORT,” empowers financial institutions to report potential evasion of U.S. export controls, extending its purview globally beyond initial Russia-centric circumstances.

  2. Global Red Flags for Export Control: The joint alert underscores universally applicable indicators aiding financial institutions, and businesses in general, in identifying transactions linked to the illicit acquisition of items subject to the EAR. These red flags serve as instrumental tools in recognizing evasion activities aligned with other nation-state adversaries and illicit actors across the globe. (Refer to the FinCEN/BIS press release for red flag pointers.)

  3. EAR-Regulated Items: Emphasis is placed on identifying transactions involving items subject to the EAR, particularly advanced technologies, such as those which can improve military capabilities and bolster mass surveillance programs associated with human rights violations.

Employing a Risk-Based Methodology to Trade Transactions

The FinCEN/BIS effort highlights the imperative for financial institutions and individuals engaged in transactions with U.S. persons or U.S.-origin goods/services to adopt a risk-based approach. This strategy proves pivotal in countering efforts to evade U.S. sanctions and export controls. Notably, financial institutions such as banks, credit card operators, and foreign exchange dealers play a significant role in providing financial services associated with international trade.

Harnessing Internal Risk Assessments

Internal risk assessments are the primary ways for organizations engaged in international trade to devise, implement and evolve risk mitigation measures that align with obligations under the Bank Secrecy Act (BSA). More specifically, financial institutions involved in providing trade financing for exporters possess valuable information for identifying potentially suspicious activities.

How Descartes can Help with Export Controls

To manage export control risk more effectively, Descartes provides a range of international trade compliance solutions. For more information on how we can help you, see our Descartes Export Compliance section.

Or you can visit Descartes Visual Compliance™ for details on:

  1. Denied and Restricted Party Screening
  2. Export Classification
  3. License Determination and Management
  4. Risk Management
  5. Sanctioned Party Ownership Screening.

See also what our customers are saying about our range of denied party screening solutions on G2, a third-party business software review website