For the first time, the United States agreed to transfer funds confiscated from Russia to Estonia for subsequent transfer to Ukraine.
The US Department of Justice reported this on February 17.
So, US Deputy Attorney General Lisa Monaco and Estonian Secretary General Tõnis Saar announced today at the Munich Security Conference the transfer of almost $500 thousand from confiscated Russian fundsto provide assistance to Ukraine.
Now watching
— The funds were seized by the United States following the discovery of an illegal procurement network attempting to import into Russia a US-made precision machine tool used in the defense and nuclear proliferation sectors. Additionally, on Wednesday, February 14, a Latvian national charged in connection with the procurement scheme pleaded guilty to violating U.S. export laws and regulations, — the message says.
The US Department of Justice noted that this was the first such transfer of funds from America to a foreign ally for the purpose of providing assistance to Ukraine. Moreover, this is the second time that the DOJ Task Force has made confiscated Russian assets available to Ukraine. Thus, last year, $5.4 million of confiscated funds were provided to the State Department to support Ukrainian war veterans.
Why Estonia, and not immediately Ukraine
The confiscated funds are transferred to Estonia, since, in accordance with the current authorities, the circumstances of this case do not allow them to be directly transferred to Ukraine, the Ministry of Justice noted.
Estonia will be able to use these funds for a project to expedite damage assessment and critical repairs to the Ukrainian power distribution and transmission system, which was targeted by Russian forces.
— Today's announcement demonstrates the unwavering determination of the United States and our Estonian partners to deny President Putin access to the Western technology he relies on to wage his illegal war against Ukraine, — said Deputy Attorney General Lisa Monaco.
The US Department of Justice added that the department “will continue to look for creative solutions to ensure the Ukrainian people have the opportunity to respond and recover& #8220;.
In turn, the Secretary General of the Ministry of Justice of Estonia, Tõnis Saar, stated that preventing “cross-border crime has been and will be an even higher priority in the future”, referring to the attempt to transfer modern American machine. Tõnis Saar hopes that in the future, such confiscations “will become the new norm for sanctioned crimes in other countries”.
The Ministry noted that such a move by the United States demonstrates that in the future, Ukraine's partners will seek and develop new solutions to ensure that the proceeds of Russian criminal networks are redirected to support the Ukrainian people.
How the crime was stopped
The attempt to circumvent the sanctions in question was stopped in March 2023. As a result of an investigation into an attempt to smuggle a dual-use export product into Russia, $484,696 was confiscated, representing funds transferred to the United States for the purchase of this product.
— Known as a jig grinder, the item is a high-precision grinding machine system that requires a license to export or re-export to Russia due to its use in nuclear proliferation and defense programs. The grinding machine was intercepted before it could reach Russia, — the message says.
In addition to the confiscation, US authorities, with the active support of the Estonian Prosecutor General's Office and the Estonian Tax and Customs Department, brought charges against several individuals and companies that were part of the smuggling ring.
Among those accused in the smuggling case — Latvian citizen Vadims Ananiks, 47, was arrested in Latvia on October 18, 2022 and pleaded guilty earlier this week in federal court in Connecticut. Ananix admitted his role in a scheme to violate U.S. export laws and regulations by attempting to smuggle an export-controlled dual-use item into Russia.
According to court documents and statements made in court, Ananix was the CEO of CNC Weld, a corporation located in Latvia. Beginning in 2018, Ananix conspired with others, including individuals in Russia and a Russian company, to violate U.S. export laws to smuggle into Russia a 500 Series CPWZ precision jig grinder manufactured in Connecticut.< /p>
In August 2019, to complete the purchase of the grinding machine, Ananix and others traveled to Bridgeport, Connecticut, where he informed the sellers that the grinding machine was being purchased for the benefit of CNC Weld. It was only after the machine was shipped out of the US that Ananix informed the sellers that CNC Weld was not the end user.
Ananix pleaded guilty to one count of conspiracy to violate the Export Control Reform Act — a crime for which the maximum penalty is five years' imprisonment.
In March 2023, funds in the amount of $484,696 involved in the purchase of a jig grinder were subsequently confiscated.
In turn, Estonia, in agreement with the United States, agreed to use the transferred funds to finance Ukraine.
In April 2023, an additional $342 thousand was ordered to be confiscated. as part of a criminal conviction against one of the shell companies involved in the network smuggling of grinding machines. These funds are currently being held in Latvia pending final execution of the confiscation order in the United States.
