Russia’s Leading Sanctions Evasion Tool Is a New Kind of Illicit Finance Threat

In a blow to Russia’s economy and war effort, on October 8, the United Kingdom sanctioned 38 entities that are helping to prop up the Kremlin. That includes two oil companies, 12 ships trafficking illicit Russian energy, two payment platforms, and three cryptocurrency exchanges. At least three companies appear to be tied to Russia’s A7 Network, which the United States designated as a Transnational Criminal Organization on October 1 in connection with its largescale facilitation of Russian and Iranian sanctions evasion. Russia’s sanctions evasion networks continuously adapt and rebrand, necessitating cross-border coordination to crack down on the entire system. A7 Is a Strategy More Than an Entity A7’s success in facilitating the movement of a self-reported volume of more than $90 billion in 2025 comes from using a diffuse, decentralized web of shell companies that obfuscate the involvement of sanctioned actors. The network relies on a web of exchanges to convert ruble-backed assets, like the stablecoin A7A5, to more liquid, dollar-backed assets, like Tether’s USDT. But when exposed by law enforcement, these exchanges rebrand themselves. Newly sanctioned TokenSpot succeeded Grinex, for instance, which succeeded Garantex, and so on. Simultaneously, hundreds of global companies conduct transactions on A7’s behalf in the traditional financial system, falsifying trade documents and preventing oversight by hiding the transactions’ Russian nexus. When investigators publicly expose companies and enforcement actions occur or appear imminent, those companies may shutter operations, but that does not prevent migration elsewhere. Jurisdictions with ties to Russia or with notable financial opacity, like Kyrgyzstan, carry a known, publicized risk of sanctions evasion. However, A7’s global threat has penetrated Western markets as well, as illustrated by the United Kingdom’s designation of Canada-registered Xeltox for sanctions. A7’s ability to undermine Western sanctions, particularly Western restrictions on Russian banking and cross-border transactions, could provide tools for Tehran, Beijing, or nonstate threat actors in the future. The combined anti-Western state threat, which FDD refers to as the “Axis of Aggressors,” is increasingly economically codependent and increasingly looking for ways to bank and make payments that Western sanctions cannot touch. A leaked briefing note for Russian President Vladimir Putin laid out plans for Putin to ask Chinese leader Xi Jinping for help in connecting Vexpay, a product of the newly designated payments company Processing KG, to China’s emerging Crossborder Interbank Payment System, or CIPS. CIPS, while currently heavily linked to the Western financial system, could become a non-Western alternative for making cross-border transactions in the future. While the outcome of this particular proposal is unclear, connecting Russian evasion infrastructure to China’s CIPS would raise the platform’s exposure to secondary sanctions risk. The U.S. Treasury Department detailed A7’s ongoing role in Iranian sanctions evasion in its latest redesignation of A7 under Iranian sanctions authorities. Investigators have also previously linked Chinese suppliers to the A7 network. Transnational, Adaptable Threats Require Transnational, Adaptable Solutions The United States should consider joining the new UK designations, most of which are not currently on the American Specially Designated Nationals List of sanctioned entities. Notably, the newly adopted Lindsey Graham Sanctioning Russia Act allows the United States to consider UK designations prima facie evidence for shadow fleet designations, which should make mirroring UK designations straightforward. In practical recognition of A7’s status as a criminal network, Washington should increasingly prioritize A7 in law enforcement efforts, considering also the possibility of pursuing criminal charges under the Racketeer Influenced and Corrupt Organizations Act (RICO) for violators within American jurisdiction, rather than solely treating cases as sanctions-regime violations. To match the global remit of A7, Washington should lead the creation of a multinational task force to investigate and crack down on newly emerging payment networks under the A7 umbrella. Angela Howard is a research analyst at the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). For more analysis from Angela and FDD, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. Follow Angela on X at @angela__howard. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.