Illuminating the role of third-country jurisdictions in sanctions evasion and avoidance (SEA)
Project Completed
PROJECT TEAM
Dr Liam O’Shea
Royal United Service Institute
Contact: liamO@rusi.org
Dr Liam O'Shea is an expert on police integrity, violence and corruption, security sector reform and politics and security in the former Soviet Union.
His research examines how to address prominent problems in Western policing, including police brutality, racism and misogyny. Dr O’Shea also focuses on how to address and manage corruption and state capture within aid and security assistance. He leads RUSI’s Organised Crime, Terror and Insecurity in Africa project, developing policy options to address these issues in Kenya, Mozambique and Nigeria. He is a former adviser in the Foreign, Commonwealth and Development Office for the UK's Conflict, Stability and Security Fund, and has consulted various organisations on security and justice in developing countries including the Overseas Development Institute and Saferworld.
Gonzalo Saiz
Royal United Service Institute
Contact: Gonzalo.Saiz@rusi.org
Gonzalo Saiz is a Research Analyst at the Centre for Financial Crime & Security Studies at RUSI, focusing on sanctions and counter threat finance. He is part of Project CRAAFT (Collaboration, Research and Analysis Against Financing of Terrorism) and Euro SIFMANet (European Sanctions and Illicit Finance Monitoring and Analysis Network).
Prior to joining RUSI in 2022, Gonzalo worked as a legal advisor to victims of human trafficking for sexual exploitation, as well as a researcher of transnational organised crime in Spain and across Europe, collaborating extensively with non-profit organisations and law enforcement agencies.
He holds Bachelor’s Degrees in Law and International Relations from the University of Deusto, and an MSc in Conflict Studies from the London School of Economics, where his dissertation examined combatting Al-Shabaab through the targeting of its illicit sources of financing.
Alexia Hack
Royal United Service Institute
Alexia Hack is a Research Analyst at RUSI examining misogyny and gender-based violence in policing and right-wing extremism. Her research also focusses on the organisational accountability of military and police forces, and their relation to vulnerable communities. She holds an MSc in Security Studies from University College London where she wrote a thesis on the role of social networks and social capital in large-scale violence. Previously, Alexia was engaged in researching borders as the contact zones between people on the move and local communities in Europe’s periphery from a post-colonial perspective at the Helmut Schmidt-University. She also completed a BA in History and English Literatures at the University of Bonn.
Olivia Allison
Olivia Allison has more than 15 years' experience carrying out complex, international investigations and supporting the development of integrity and governance for state-owned companies, international companies, and international financial institutions (IFIs). She has a wide range of financial crime and asset tracing experience from leadership roles held in London, Moscow, Kyiv, and Kazakhstan.
She is currently working as an independent consultant, following a role as a Senior Managing Director at the boutique investigations consultancy K2 Integrity. Before that, she was a partner at KPMG, where she set up and led the Forensic team in Kyiv from 2016-2020 (also leading the KPMG Forensic team in Kazakhstan in this period).
PROJECT SUMMARY
This project examines why third countries – countries neither sending sanctions or the target of them – either facilitate sanctions evasion and avoidance (SEA) or support efforts to counter it. It focuses on sanctions relating to Russia since February 2022 and it based on rapid review of the thematic literature on SEA and empirical research in 13 third countries.
Our analysis examines how flows of Russian financial and human capital and patterns of SEA changed since February 2022; what factors affect either facilitation of or support to counter SEA; what are the types of individuals/organisations that facilitate SEA, and what methodologies and typologies do they use. The project also draws on its empirical and analytical findings to suggest policy recommendations to counter SEA.
The project’s provisional conclusions are that SEA in third countries appears to be determined at least as much, if not more, by economic factors compared to political and geopolitical factors. These include third-country’s economic dependency on target countries and its trade and commercial capabilities and interests. SEA is also frequently driven more by private actors (i.e. individuals/companies) than state actors, even when a country’s political leadership is aligned with sender countries.
It also identifies more specific, proximate causal factors by comparing types of SEA, by industry and sector. The presence and degree of the following factors increases the likelihood of SEA:
Ease of setting up anonymous or nominee corporate structures and access to professional advisory services
Access to financial services, including banks, payment systems and cryptocurrency
Transhipment capacity
Logistics capability and access to logistics infrastructure used in transshipment or shipment of sanctioned goods
Target country citizens ease in moving and engaging in economic activity in the third country
Inability of sanction-sending states to regulate or enforce sanctions in a particular sector or industry
PUBLICATIONS
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Illuminating the role of third-country jurisdictions in Sanctions Evasion and Avoidance (SEA) (SOC ACE Research Paper RP18)
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Publications from this project will be posted here when available