A7 sanctions evasion case exposes gaps in financial crime expertise and product due diligence
As published in RegTech Insight.
Recent revelations surrounding A7, a Russia-linked sanctions-evasion network, have raised questions about how effectively financial institutions identify financial crime risks hidden within investment products, intermediaries, and complex ownership structures.
According to FinCEN, A7's overseas sub-agents processed more than $17 billion through accounts at approximately 435 financial institutions across at least 83 countries between January 2025 and June 2026. The case highlights how sanctions exposure can extend well beyond a firm's direct customers and established business relationships.
In an interview with RegTech Insight, FinScan's Becki LaPorte, Principal for AML Strategy and Innovation, discusses a critical gap in financial crime prevention: the disconnect between investment-product due diligence and the compliance professionals responsible for identifying sanctions and money laundering risks.
Drawing on her experience as a former chief AML officer at a major U.S. broker-dealer, LaPorte explains how product review teams may overlook risks involving beneficial ownership, intermediaries, and underlying investments when financial crime specialists are not routinely involved in the due diligence process.
The discussion also examines the challenges created by omnibus accounts, limited visibility into underlying clients, and assumptions that domestic business activities carry little international sanctions exposure.
LaPorte emphasizes the importance of bringing financial crime expertise into product reviews, establishing clear escalation responsibilities, and strengthening screening through high-quality data and controls tailored to an institution's business model.
As sanctions-evasion techniques become increasingly sophisticated, the A7 case offers an important reminder that effective financial crime prevention depends on collaboration across business functions, knowledgeable compliance professionals, and reliable data.
