International Trade Enforcement Roundup | February 2023


Russian National Charged with Supplying U.S. Technology to the Russian and North Korean Governments (DOJ Action)

Those involved. Ilya Balakaev, Russian national.

Charges and penalties. Conspiracy to Defraud the United States; Conspiracy to Violate the International Emergency Economic Powers Act (IEEPA); Conspiracy to Violate Export Control Reform Act (ECRA); and Smuggling Goods from the United States (maximum of 75 years in prison). What happened? On February 24, Balakaev was indicted for illegally smuggling various controlled devices from the United States to Russia and North Korea. Balakaev entered into contracts with Russia’s Federal Security Service (FSB) to repair spectrum analyzers and signal generators through his company, Radiotester LLC. Such devices are not easily obtained in Russia, so Balakaev leveraged a procurement network in the U.S. to obtain the relevant equipment. He reportedly entered into at least 10 contracts with the FSB, procured more than 43 devices, and traveled to the United States more than a dozen times in furtherance of his procurement efforts. The spectrum analyzers are included on the Commerce Control List (CCL) and require a license for export, but neither Balakaev nor Radiotester had such a license. Balakaev also provided a North Korean government official with an Altair 4X gas detector which is “used to detect gases such as combustible gases, oxygen-deficient atmospheres and toxic gases.” A license was required from the Department of Commerce to export the gas detector, yet (again) neither Balakaev nor his company obtained such a license.

The DOJ press release can be found here. The indictment can be found here.

Notably. The DOJ focuses on improper actions of individuals as well as the actions of larger entities. Individuals who violate U.S. export laws may face lengthy prison times – in this case, upwards of 75 years. Understanding and complying with these laws is crucial to head off liability.

Associate of Sanctioned Oligarch Indicted for Sanctions Evasion and Money Laundering (DOJ Action)

Those involved. Vladimir Voronchenko, a Russian national and permanent U.S. resident.

Charges and penalties. Conspiracy to Violate IEEPA; Violation of IEEPA; Conspiracy to Commit International Money Laundering; International Money Laundering (maximum of 20 years for each offense). He was also charged with Contempt of Court after fleeing to Moscow after receiving a grand jury subpoena. (the maximum sentence is within the discretion of the court). What happened? Voronchenko, described as a “longtime friend and associate of [Viktor] Vekselberg,” a Russian oligarch first sanctioned in 2018 (and redesignated in 2022, at which time his yacht and aircraft were blocked), was charged for allegedly making payments, amounting to approximately $4 million, to maintain the oligarch’s U.S. properties. The properties include a New York apartment on Park Avenue; a house and apartment in Fisher Island, Florida; and a house in Southampton, New York. The indictment also alleges Voronchenko assisted Vekselberg when initially buying the properties using an unnamed New York attorney and two shell companies to conceal the real estate’s true owner.

The DOJ press release can be found here. The indictment can be found here.

Notably. Last month, two other associates of Vekselberg were charged for helping the sanctioned oligarch maintain his 255-foot mega yacht, Tango. We wrote about it in the January 2023 edition of the Roundup.

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