How sanctions evasion works
Sanctions evasion techniques are the repeatable methods used to complete a prohibited transaction: concealing who a counterparty is, what goods are, where they came from, or how a payment travelled.
- techniques
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25
- categories
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7
- framing
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detection side
There is no single act called sanctions evasion. There is a set of recurring methods, each solving a specific problem for someone who cannot transact in their own name, and each leaving a specific kind of trace.
The categories below are organised by what is being concealed rather than by industry. Corporate techniques conceal who. Trade techniques conceal what. Maritime techniques conceal where. Financial and digital asset techniques conceal how the value moved. Professional enablers are the layer that supplies the others.
Almost every documented scheme of any size combines several of them, which is why the pages cross-link as heavily as they do. A front company with no bank account is useless; a misinvoiced shipment with no company behind it has nowhere for the value to land.
Every page describes mechanics only at the level published in official advisories, FATF and Egmont Group typology reports, UN Panel of Experts reports and court filings, and every one ends on detection and enforcement. If you want the reasoning behind that, the about page states it explicitly.
Corporate concealment
Who really owns and controls the counterparty.
- What is a front company? A front company is a business that trades normally but exists largely to hide another party's involvement in its transactions. The real activity is the cover; the concealed party is the point.
- What is shell company layering? Layering is the use of successive companies in different jurisdictions between an asset and its owner, so that no single register, filing or payment record shows the connection between them.
- What are nominee directors and nominee shareholders? A nominee is formally recorded as a company's director or shareholder but acts on an undisclosed party's instructions. The register names the nominee; the decisions belong to someone else.
- What is ownership threshold structuring? Arranging shareholdings so that designated parties own less than the percentage at which ownership is automatically attributed, while control of the entity stays where it was.
Trade and customs
What the paperwork says a shipment is, versus what it is.
- What is trade misinvoicing? Trade misinvoicing is misstating the price, quantity or description of goods on trade documents, so that value moves across a border in a direction and an amount the paperwork does not admit.
- What is HS code misclassification? Declaring goods under a Harmonised System commodity code that does not describe them, so that they attract the wrong duty, escape a licence requirement, or disappear from the statistics that would show them.
- What is a phantom shipment? A phantom shipment is a trade transaction that is documented, financed and paid in full when no goods, or far fewer goods, were ever shipped. The payment is the entire purpose.
- What is third-country transshipment? Routing restricted goods through an intermediate country so that the shipment reaching the restricted destination appears to originate somewhere the exporter would have supplied without question.
- What is dual-use re-export diversion? Buying controlled civil-use goods lawfully in an open market and re-exporting them to a restricted end user, exploiting the fact that the item itself looks entirely ordinary.
- What is end-user certificate fraud? Supplying a false statement of who will use controlled goods and for what, so that a licence is granted or a sale proceeds on a representation the exporter cannot verify.
Maritime
Moving cargo by sea outside the reach of the restriction.
- What is cargo origin blending? Mixing, decanting or re-documenting a commodity in transit so that restricted cargo is no longer traceable to its origin and arrives certified as coming from somewhere else.
- What is a ship-to-ship transfer? Transferring cargo directly between two vessels at sea, rather than through a port, so that the cargo changes hands where there is no port authority, no customs entry and no independent record.
- What is AIS manipulation and AIS spoofing? Disabling a ship's position transponder, or transmitting false position data through it, so that the vessel's recorded track does not show where it actually went.
- What is flag hopping? Re-registering a ship repeatedly between flag states, often to registries with limited oversight, so that its regulatory history is broken and its documented identity keeps changing.
- What is opaque marine insurance? Presenting protection and indemnity or hull cover from a provider that cannot be identified, or whose ability to meet a claim cannot be established, in order to satisfy a requirement to be insured.
- What is price cap attestation fraud? Providing a false or unsupported statement that oil was bought at or below a capped price, so that shipping, insurance and financing services remain available for a cargo that does not qualify.
Banking and payments
Getting value through the correspondent system.
- How is correspondent banking used to evade sanctions? Using a chain of banks that each know only their own customer, so that a payment for a restricted party reaches a currency it could not access directly, without any bank in the chain seeing the whole transaction.
- What are third-country bank accounts and how are they used? Holding accounts in a jurisdiction unconnected to the restricted party, the goods or the contract, so that payments reach and leave the restricted economy without ever appearing to touch it.
- What is hawala and how does informal value transfer work? Settling obligations between brokers in different countries by netting them against each other, so a customer's payment reaches a recipient abroad without any funds crossing a border.
- How are gold and commodities used to settle sanctioned trade? Settling cross-border obligations by moving physical gold or fungible commodities instead of currency, so that value transfers without any payment entering the banking system.
Digital assets
Settlement rails outside correspondent banking.
- How is cryptocurrency used to evade sanctions? Settling obligations in virtual assets so that value moves without a correspondent bank, a payment message or a screening system in the path, and without any institution able to block it in transit.
- What is stablecoin settlement and why does it matter for sanctions? Settling commercial obligations in a fiat-referenced token, so that a dollar-denominated trade can be paid without a dollar ever passing through a correspondent bank.
- What are mixers and chain hopping? Breaking the traceability of on-chain funds by pooling them with other users' funds, or by moving them between blockchains, so that outputs cannot be readily linked to their inputs.
Aviation
Aircraft, parts and the certificates that follow them.
Professional enablers
The lawyers, agents and formation firms in the middle.
Where to go next
- The red-flag indicator library — every indicator on this site in one filterable table, each attributed to the advisory it comes from.
- The enforcement case database — documented outcomes, with penalties and sources.
- The glossary — every term used across these pages, defined and sourced.
- How evasion is detected — the five methods that recur across all of these techniques.