Sanctions evasion

As of September 2026: The Second Circuit affirmed the Amadea forfeiture on standing grounds on June 1, 2026; the court did not decide the yacht's ultimate beneficial owner, and the US government's allegation about Suleiman Kerimov is not a finding on that point. Task Force KleptoCapture was disbanded by a February 5, 2025 memo, and this page did not verify any successor. The September 2026 Iran-related designations are current US actions that may be challenged or amended, and the SDNY civil forfeiture complaint contains allegations that have not been proven in court.

Also called: sanctions busting · sanctions circumvention · shadow banking for sanctioned states.

What is sanctions evasion, and how does it differ from laundering?

Sanctions are legal restrictions on a person, company, bank, or country. When the US Treasury’s Office of Foreign Assets Control (OFAC) lists someone as a blocked person, their property in the US, or in the hands of US persons, is frozen, and US persons may not deal with them. Sanctions evasion is any effort to keep dealing anyway, by disguising who owns an asset, who is on the other side of a payment, or where a shipment is going.

Money laundering has a different starting point. It hides the criminal origin of funds so they can be spent safely. The money is dirty, and the disguise is meant to make it clean. In sanctions evasion, the money may be perfectly legal. A sanctioned billionaire’s wealth may come from ordinary business. What is illegitimate is the attempt to keep using it through the financial system that the sanction was meant to close off.

The two overlap because the tools are the same. Both rely on shell companies, nominees, trusts, correspondent banks, and, increasingly, crypto. Both concentrate in layering and integration. They also connect in law. In the Amadea forfeiture described below, the US government’s theory was that payments made in breach of a sanctioned owner’s designation counted as “specified unlawful activity” under the federal money laundering statute, which is what turned a sanctions problem into a laundering one. The educational point is the difference in question asked. Laundering investigators ask where the money came from. Sanctions investigators ask who really benefits.

How do sanctioned owners keep their assets?

OFAC’s March 2026 advisory describes the pattern it calls a sham transaction: a blocked person, often working through proxies, transfers property or sets up an arrangement that hides a continuing interest rather than ending it. The advisory says blocked persons have used opaque legal structures, including trusts, along with proxies, straw owners, and front businesses, to hide interests in investment vehicles, bank accounts, real estate, private jets, yachts, and companies. Its examples include an oligarch who moved his jet into a trust for his unsanctioned wife and kept flying on it, and a sanctioned company that reincorporated under a new name with nominal owners while its operations continued.

For states rather than individuals, the pattern shifts to channels. The steps often look like this:

1. Title moves, control stays. Ownership is transferred to a relative, a trusted associate, or a company on paper. The sanctioned person keeps deciding how the asset is used.
2. Ownership is layered. Trusts, foundations, and holding companies in different countries put distance between the person and the property.
3. Payments avoid the dollar system. Trade is settled in local currencies through correspondent accounts, or value is moved in crypto, so US banks never see it.
4. Intermediaries lend legitimacy. Agents, lawyers, trustees, and advisers do the paperwork, the negotiating, and the introductions, and can make a sham look routine.

Why sanctions evasion works

Much sanctions enforcement depends on private parties. Banks, insurers, brokers, and dealers must decide whether a customer or counterparty is blocked, and the answer often depends on facts they cannot see: who stands behind an entity, or who is really running it. Every extra layer of ownership raises the cost of that question.

Structures also cross borders. The advisory notes that the risk grows when holding entities sit in jurisdictions that have little connection to the property they hold, or that offer laws and structures that make ownership easy to obscure.

Finally, a formal change of ownership can fool checks that only look at names and percentages. OFAC’s advisory says it supplements its 50 Percent Rule with factors for testing whether a divestment actually took place. That is why authorities now emphasise substance over form: OFAC applies functional definitions of “interest” and “property interest” that look past legal formalities to practical and economic reality.

Real cases: a yacht, a painting trade, and a bank

The Amadea. US authorities seized the 348-foot superyacht Amadea in or about April 2022 and began a civil forfeiture action in October 2023, alleging it was really owned by Suleiman Kerimov, a sanctioned Russian national. The people listed as owners, businessman Eduard Khudainatov and his company Millemarin Investments, said Khudainatov was the beneficial owner. After a four-day hearing, the trial court found they were straw owners. Under a September 2021 agreement, Millemarin had committed to sell the yacht for EUR 225 million to a Cayman Islands company formed less than a week earlier, with the full price paid by the end of October 2021. After that, the owners had given up possession, control, and any financial stake, and they bore no operating costs. The court entered final forfeiture judgment on March 18, 2025, and the Second Circuit affirmed on June 1, 2026. It ruled on standing, not on the ultimate ownership question, so Kerimov’s ownership remains the government’s allegation, not a judicial finding in this case.

Rotenberg art purchases. A 2020 Senate subcommittee report described how Arkady and Boris Rotenberg, sanctioned in 2014, bought more than $18 million of art through transactions that touched the US financial system in the months afterward. Funds were traced to shell companies linked to the brothers, and a Moscow-based art adviser bought works on their behalf. Auction houses and dealers were on the other side of the sales. The report described the US art market as a largely unregulated industry, which is why the case is often cited alongside the art and luxury goods page.

Iran shadow banking, 2026. In September 2026, Treasury announced three actions under “Operation Economic Outcast.” It designated Russia’s VTB Bank for opening offices in Iran and building correspondent accounts denominated in rials and rubles to move frozen Iranian assets. It designated an Iranian digital asset exchange, BitBank, which it said a financier used to move hundreds of millions of dollars of bitcoin to the Islamic Revolutionary Guard Corps. And prosecutors in Manhattan filed a civil forfeiture complaint against about $61 million in cryptocurrency they allege is tied to black-market Iranian oil sales. The forfeiture complaint consists of allegations that have not been proven in court, and Binance, whose accounts prosecutors say were used, is not a defendant.

How sanctions evasion gets caught

Look through the title. The OFAC advisory lists seven red flags, none decisive alone: commercially unreasonable terms, transfers to family or close associates, an unclear purpose for the transfer, unduly complex structures in higher-risk jurisdictions, continued involvement of the blocked person, transfers made near the time of designation, and evasive answers to questions. Investigators combine these rather than relying on any single one.

Go after the choke points. Evasion networks need a few visible institutions to turn value into something usable. Treasury’s Iran actions targeted a bank, an exchange, and a proceeds network for that reason. A foreign bank that keeps dealing with a designated one risks its own sanctions exposure, which is why correspondent accounts are so often the lever. The detection section shows how such signals become cases.

Hold the intermediaries accountable. OFAC’s December 2025 settlement with a US attorney who served as fiduciary of a sanctioned oligarch’s trust, for $1,092,000, showed that professionals who keep serving a blocked person’s interest can face penalties of their own. OFAC said that gatekeepers such as accountants, attorneys, and trust and corporate service providers are often better positioned than others to spot a hidden interest.

Forfeiture in court. The Amadea case shows how civil forfeiture can reach an asset without a criminal conviction of its owner. Enforcement capacity, however, is not fixed. The Justice Department disbanded Task Force KleptoCapture in February 2025, and this page did not verify a successor as of September 2026. The tools remain: OFAC designations, civil forfeiture, and bank controls.

First published September 21, 2026 · Last updated September 21, 2026 · Legal statuses current as of September 2026