Sanctions compliance and secondary sanctions through the eyes of an attorney who has spent a quarter-century explaining to clients why “we’re not in America” is not an argument.
Arkady Bukh, Managing Partner, Arkady Bukh Law Firm · Brooklyn – Miami · arkadybukhlawfirm.com
Over a quarter-century of federal practice – from Brooklyn to Miami – I have seen dozens of clients convinced that if their office is not in the United States and their director is a citizen of a third country, U.S. law must be somewhere far away, like the weather on the other side of the hemisphere.
Spoiler: OFAC has a very good umbrella and an even better memory.
Below are several now-unsealed cases involving the U.S. Department of Justice, Department of the Treasury, and State Department where precisely that assumption proved costly for the people involved.
One important caveat should be kept in mind throughout this article: we are talking about specific individuals and companies accused of specific crimes – not about the countries where they were based. The UAE, Kazakhstan, Azerbaijan, and Uzbekistan are major, respected business and tourism centers with growing and increasingly transparent financial infrastructures. Their regulators themselves are becoming more active in investigations and in closing loopholes when they are discovered. Frankly, that makes these jurisdictions even more attractive for legitimate businesses.
Brooklyn, Electronics, and War: A Few Names from Russia-Related Cases
Let us begin with one of the most prominent categories of cases in recent years – export cases involving Russia.
In the fall of 2023, the U.S. Attorney’s Office for the Eastern District of New York brought charges in two separate cases involving the illegal export of dual-use goods.
In United States v. Goltsev et al., prosecutors cited communications in which the defendants discussed “test” orders routed through intermediary structures abroad – a way of determining whether a shipment could pass through a new logistics chain before sending a larger quantity to the ultimate recipient. Both defendants later pleaded guilty.
In the TROS case involving Sergey and Alexander Ushko, prosecutors described the purchase of machine tools through an intermediary in a third country for subsequent shipment to the ultimate end user.
And in 2025, Vadim Yermolenko, a U.S. citizen and Russian national who was a permanent resident of New Jersey, was sentenced to 30 months in prison for participating in a network that attempted to procure ammunition and sensitive dual-use electronics for entities connected to the Russian military and intelligence services.
In none of these cases were the intermediary jurisdictions themselves accused of wrongdoing. The cases focused on specific individuals and shell companies that allegedly and knowingly misled sellers and carriers.
Dubai, Almaty, Tashkent: The Geography of Procurement Expands
In August and October 2024, the U.S. Treasury Department, State Department, and the Department of Commerce’s Bureau of Industry and Security carried out two major coordinated rounds of sanctions targeting networks supplying Russia’s military-industrial complex with microelectronics and CNC machinery.
Together, the measures involved several hundred individuals and companies across nearly twenty jurisdictions.
Among the countries where individual sanctioned companies were registered, official documents named, among others, Hong Kong, China, India, Turkey, and Switzerland – as well as the UAE, Kazakhstan, Kyrgyzstan, and Uzbekistan.
The context matters.
These four countries appeared in the same materials as some of the world’s largest financial and industrial centers simply because enormous volumes of legitimate international trade pass through any major and rapidly growing business hub. Statistically, that is also where individual bad actors will sometimes be found.
Regulators in these countries, according to specialized legal publications, are increasingly cooperating with U.S. and European counterparts precisely to distinguish the overwhelming majority of legitimate business from isolated fraudulent schemes.
A Crypto Exchange with a Familiar “No KYC”: The Bitzlato Case
In January 2023, the U.S. Attorney’s Office for the Eastern District of New York charged Anatoly Legkodymov, the principal owner of Bitzlato, a cryptocurrency exchange registered in Hong Kong.
According to prosecutors, more than $700 million in transactions connected to illicit activity flowed through the platform, including transactions associated with what was then the largest darknet marketplace.
In internal company communications cited in the indictment, Legkodymov himself allegedly referred to some of the exchange’s users as “known crooks” – a rare case in which a company’s own compliance record and the indictment appear to tell almost the same story.
Customers were asked for very little documentation.
Legkodymov was not arrested overseas, however. He was arrested in Miami, where he personally administered the exchange from Florida.
The lesson for those who like to say “the server is overseas” is simple: if even one key person regularly opens the laptop while physically present in the United States, the jurisdictional question can become much easier to answer – roughly like arguing about whether it is raining while already standing outside in the rain.
Personal Designations: Shelbit, Nobitex, and the Zarringalam Brothers’ Network
In the summer of 2026, OFAC designated the crypto platform Shelbit and its founder, Siavash Kaivanpour, according to Reuters and the U.S. Treasury Department. The platform was reportedly used to process approximately $4 billion in transactions as part of a scheme linked to Iran’s central bank and entities that Israel has associated with the Islamic Revolutionary Guard Corps.
Earlier, OFAC also designated the Iranian cryptocurrency exchange Nobitex and a network of companies that the Treasury Department linked to the Zarringalam brothers – offshore and trading structures established by their beneficial owners in multiple jurisdictions to facilitate transactions connected to Iran’s military establishment.
What is particularly notable is that some of these schemes were first brought to public attention by a local virtual-asset regulator. In other words, domestic oversight – not only U.S. investigators – responded to suspicious activity.
“Institutions dealing in cryptocurrency are not above the law, and their owners are not beyond reach,” federal prosecutors said in the Bitzlato case.
The formula is universal: it applies regardless of which city in the world a person uses to operate a platform.
Another example from the same category is Blue Sky General Trading LLC, a trading company that the U.S. Treasury described as using its status in a regional business center to facilitate transactions on behalf of Iranian beneficiaries concealed behind an ordinary-looking trading company.
Again, the allegations were directed at specific beneficial owners who allegedly concealed the ultimate recipients of the funds – not at the jurisdiction where the company was registered.
Money Loves an Account: Why OFAC Looks Beyond the Goods
Another category of cases concerns money rather than physical goods, and it extends far beyond Iran.
In February 2024, OFAC imposed its first sanctions on companies that helped Russian banks gain access to alternative payment services and virtual assets in an effort to circumvent the international financial system. A year later, the agency expanded the measures to include more than a dozen additional entities in Russia’s fintech sector.
In August 2026, OFAC designated ten individuals whom the agency described as part of a courier network. According to the Treasury Department, the individuals traveled between several countries in the region on ordinary commercial flights, physically transporting cash on behalf of an organization designated as a terrorist organization by the United States.
We will deliberately not reconstruct the details of the routes or payment mechanisms here. That is the work of investigators, not the subject of a legal column.
From a professional perspective, the more important point is this: once a transaction involves a U.S. dollar or a bank that depends on maintaining a correspondent account in New York, U.S. sanctions exposure can become a serious issue.
OFAC may restrict a foreign bank’s access to U.S. correspondent accounts if the bank knowingly conducts a significant transaction for or on behalf of a sanctioned person.
For a regional bank, that can be a much more powerful incentive than the Iranian or Russian counterparties themselves.
That is one reason banks in the region’s business centers have steadily tightened their internal compliance procedures rather than doing the opposite.
The “Long-Arm” Doctrine: Why an Office Outside Miami Does Not Protect You from Miami
Here is the heart of the matter – the reason this column was worth writing.
The classic client objection is:
“I don’t have an office in the United States. I don’t have American employees. Why are you coming after me?”
My honest answer is: I’m not the one coming after you. The statute is.
U.S. jurisdiction in sanctions and export-control matters can arise through several independent connections, and in many situations a single one can be enough:
- Citizenship or residency status. Any U.S. citizen or lawful permanent resident is generally subject to U.S. sanctions rules regardless of where that person is physically located or where the person’s business is incorporated.
- Company registration. A company incorporated in Delaware, Wyoming, Florida, or another U.S. jurisdiction is a U.S. person for purposes of sanctions law, even if its entire operational business is conducted abroad.
- U.S.-dollar transactions. A USD transaction may pass through the U.S. financial system or a U.S. correspondent bank. When it does, that can create a direct U.S. jurisdictional nexus for the transaction.
- Infrastructure located in the United States. Hosting, cloud services, payment gateways, or other infrastructure located in the United States can create additional U.S. connections, depending on the circumstances and the applicable sanctions or export-control rules.
Individually, each criterion can sound like: “That doesn’t apply to me.”
The problem is that an international business with millions of dollars in annual turnover will often have at least one such connection. Dollar transactions are common. U.S.-based cloud providers are ubiquitous. A partner or investor who is a U.S. citizen is hardly unusual in international business.
Once several connections exist simultaneously, the question of U.S. jurisdiction becomes much less theoretical.
And the bank’s compliance department will often discover the issue long before the business owner expects it to.
Usually, there is considerably less politeness in that discovery process than anyone would prefer.
What Should You Do?
The good news is that U.S. jurisdiction is not a sentence. It is a legal framework within which businesses can operate – provided they structure their activities appropriately.
That means conducting sanctions due diligence in advance, obtaining OFAC licenses where applicable, and structuring payment flows with sanctions and export-control risks in mind.
The bad news is that most clients contact an attorney only after receiving a notice from a bank about a frozen account, rather than before.
Our practice operates at the intersection of international business, sanctions compliance, and federal defense. The attorneys at Arkady Bukh Law Firm speak Russian and handle matters involving major business centers in the region as well as New York and other U.S. jurisdictions.
If your business works with counterparties in regions where sanctions risks are changing faster than banks can update their compliance policies, it is better to review your payment structure before you receive a call from OFAC – not afterward.
At the federal level, our practice handles extradition matters and OFAC-related issues worldwide, as well as cases in federal courts across the United States.
So “we don’t have your court in our city” is, unfortunately, not much of an argument either.
Arkady Bukh Law Firm · arkadybukhlawfirm.com
This material is provided for general informational and journalistic purposes. It is based on publicly available press releases and materials from the U.S. Department of the Treasury and U.S. Department of Justice, as well as media reports, including Reuters. It does not constitute legal advice and should not be relied upon as legal advice regarding any specific situation.