U.S. charges Russians for shipping military equipment, Venezuelan oil (updated)

N D A Securities

19/10/2022 19:39

(Adds quotes, details on sanctions)
    By Luc Cohen and Daphne Psaledakis
       NEW YORK/WASHINGTON, Oct 19 (Reuters) - U.S. prosecutors
on Wednesday charged five Russian nationals for sanctions
evasion and other charges for shipping military technologies
bought from U.S. manufacturers to Russian buyers, some of which
ended up on the battlefield in Ukraine. 
        Federal prosecutors in Brooklyn said the electronic
components purchased by Russian nationals Yury Orekhov and
Svetlana Kuzurgasheva included semiconductors, radars and
satellites. Some of the electronics obtained through the scheme
have been found in Russian weapons platforms seized in Ukraine,
prosecutors said. 
    They used a German company to ship the military
technologies, as well as Venezuelan oil, to Russian purchasers,
prosecutors said.
    Orekhov was arrested in Germany on Monday. Another Russian
charged in the case, Artem Uss, has been arrested in Italy and
the United States is seeking his extradition, prosecutors said.
Reuters could not immediately reach any of the defendants for
comment. 
        "We will continue to investigate, disrupt and prosecute
those who fuel Russia's brutal war in Ukraine, evade sanctions
and perpetuate the shadowy economy of transnational money
laundering," Breon Peace, the top federal prosecutor in
Brooklyn, said in a statement.    
  
        Also on Wednesday, the U.S. Treasury Department
sanctioned Orekhov and two companies he controls, Nord-Deutsche
Industrieanlagenbau GmbH, also known as NDA, and Opus Energy
Trading LLC. Treasury described Orekhov as a procurement agent
and said some of the shipments of military and sensitive
dual-use technologies to Russian users violated U.S. export
controls. 
    The U.S.-origin technologies can be used in fighter
aircraft, ballistic and hypersonic missile systems, smart
munitions, and other military applications, Treasury said. 
    The charges and sanctions come as Washington is seeking to
expand sanctions on Russia and crack down on evasion to pressure
the Kremlin to stop its invasion of Ukraine.
    At a first-of-its kind gathering last week with officials
from 32 countries and the United States, Washington warned it
can impose sanctions on people, countries and companies that
provide ammunition to Russia or support its military-industrial
complex.  urn:newsml:reuters.com:*:nL1N31F0QU
    "We know these efforts are having a direct effect on the
battlefield, as Russia’s desperation has led them to turn to
inferior suppliers and outdated equipment," Deputy Secretary of
the Treasury Wally Adeyemo said in a statement.  
    Prosecutors said Orekhov and Uss own NDA and used it as a
front to purchase the technologies and ship them to Russian
end-users, including sanctioned companies controlled by Timofey
Telegin and Sergey Tulyakov, two of the other Russian nationals
charged on Wednesday. 
    The defendants used fake companies and submitted false
information to U.S. banks, which processed tens of millions of
dollars worth of transactions in violation of sanctions,
prosecutors said. The defendants also used cryptocurrency for
the transactions and to launder the proceeds, prosecutors said.
        Orekhov and Uss also used NDA to ship millions of
barrels worth of oil from Venezuela to buyers in Russia and
China, working with two other defendants, Juan Fernando Serrano
and Juan Carlos Soto, to broker the deals with Venezuelan state
oil company PDVSA, upon which the United States placed sanctions
in 2019. 
        Neither PDVSA nor Venezuela's information ministry
immediately responded to requests for comment.
    After the initial round of U.S. sanctions on PDVSA, Russia's
Rosneft emerged as a key intermediary for Venezuelan crude.
After Washington sanctioned Rosneft subsidiaries over their
dealings with PDVSA, dozens of firms with no track record of oil
trading have been intermediating in sales of Venezuelan oil to
Chinese buyers. 
        A Reuters investigation found many of them were
registered as webpages in Russia.    
 (Reporting by Luc Cohen in New York and Daphne Psaledakis in
Washington
Additional reporting by Vivian Sequera in Caracas
Editing by Rosalba O'Brien and Alistair Bell)
 ((luc.cohen@thomsonreuters.com; +1 646 361 1622; Reuters
Messaging: Twitter: @cohenluc))