Targeting Sanctions Evasion Network Supporting Russia

Targeting Sanctions Evasion Network Supporting Russia

To hinder Vladimir Putin’s ability to wage war against Ukraine, the United States and its partners last year imposed crippling new sanctions on Russia’s military-industrial complex and tightened those that were introduced after Russia’s invasion of Crimea in 2014.

As Russia lost access to key components necessary for the operation of its more sophisticated weapons systems, it began to look for other ways to acquire them. On February 1, the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, imposed sanctions, pursuant to Executive Order 14024, on 22 individuals and entities around the world, for their connection to a global sanctions-evasion network supporting Russia's military-industrial complex.

Russia- and Cyprus-based arms dealer Igor Vladimirovich Zimenkov leads the network. Its members have procured materials for, and supported key parts of, Russia’s military-industrial complex, including state-owned Russian defense entities Rosoboronexport and State Corporation Rostec. OFAC has previously sanctioned both of these entities.

Igor Zimenkov and his son Jonatan Zimenkov have worked with numerous individuals and entities to enable Russian defense sales to third-country governments, thus helping to finance the network.

Igor and Jonatan Zimenkov were designated pursuant to Executive Order 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy, and Jonatan Zimenkov for having materially assisted and supported Igor Zimenkov.

Also designated were the Singapore-based Zimenkov network shell company, Asia Trading & Construction PTE Limited and its director, Serena Bee Lin Ng; and Texel F.C.G. Technology 2100 Limited and its Chief Operating Officer, Marks Blats, as well as Elektro-optika SIA, which Blats owns. Alexander Volfovich, a Cyprus-based arms broker, was sanctioned for being an owner and director of GBD Limited, and the public, registered owner of six other companies in the Zimenkov network.

Also designated under Executive Order 14024 were Stanislav Volfovich and Ariel Volfovich; Maks Borisovich Piflaks and his son, Gilad Piflaks; Igor Palnychenko; and Palnychenko’s two companies, Pitaron Limited and Terra-Az Limited.

“Russia’s desperate attempts to utilize proxies to circumvent U.S. sanctions demonstrate that sanctions have made it much harder and costlier for Russia’s military-industrial complex to re-supply Putin’s war machine,” said Deputy Secretary of the Treasury Wally Adeyemo. “Targeting proxies is one of many steps that Treasury and our coalition of partners have taken, and continue to take, to tighten sanctions enforcement against Russia’s defense sector, its benefactors, and its supporters.”