Washington needs to work more closely with financial supervisors in Asia and elsewhere to identify front companies processing payments for A7, a Russian-backed sanctions-evasion network. The threat of exclusion from the US financial system encourages foreign banks to comply with sanctions, yet identifying an account holder does not necessarily reveal the customer behind a payment. Without that knowledge, banks may reject legitimate business while missing prohibited transactions.
A Russian importer pays A7 in roubles inside Russia for bills of exchange, essentially IOUs, while an A7-controlled overseas company pays the supplier in its own name, concealing the Russian buyer. US Treasury reports A7’s front companies operate in Hong Kong, Indonesia, Kyrgyzstan, the Seychelles, Turkey and the United Arab Emirates.
The Financial Times found Russian exporters deposited foreign earnings in A7-linked accounts abroad, receiving roubles at home. The newspaper traced more than US$6.9 billion (nearly A$10 billion) through international banks and found night-vision scopes invoiced as toughened glass. A7 also used an authorised London payments firm, though the reporting did not establish whether the firm knew it was serving A7. Scrutiny must therefore extend beyond shell companies to customers using legitimate payment services.
International payments can involve correspondent banks, which process transfers in foreign currencies for other banks. In an investigation drawing partly on A7 records, the New York Times traced a Russian firm’s January 2025 purchase of electromagnetic-warfare components from Hong Kong. First Abu Dhabi Bank arranged payment to an account held by China’s Zhejiang Chouzhou Commercial Bank at Bank of America, which received transfer instructions without purchase details. The American bank’s direct customer was the Chinese bank, not the Russian purchaser.
Limited visibility, however, does not excuse weak checks on other banks’ payments. Treasury announced more than US$1.21 billion in penalties against Bank of America on 13 October for anti-money-laundering and sanctions failures, including inadequate checks on foreign banks’ accounts. The announcement did not mention A7. Foreign institutions, meanwhile, face secondary sanctions that threaten their access to American banks over specified dealings with sanctioned parties or targeted sectors, whatever the currency. Banks may consequently refuse even lawful Russian business rather than risk their US operations.
Russian firms nevertheless continued paying Chinese suppliers through intermediaries in Kazakhstan and Kyrgyzstan after Chinese banks restricted payments over secondary sanctions fears, Reuters reported in April 2024. These routes added costs, yet where trade and payments remained lawful, changing providers within existing banking networks amounted to one form of avoidance, whereas A7 evades sanctions by concealing the Russian buyer.
Firms whose suppliers accept yuan can also change payment infrastructure, a second form of lawful avoidance. China’s Cross-Border Interbank Payment System settles cross-border yuan payments without requiring a US bank and has its own messaging arrangements, though banks can use the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a Belgian messaging network subject to EU restrictions. If suppliers require dollars, payment may bring US banks back into the transaction.
Customers can bypass bank transfers using stablecoins, digital tokens designed to track a currency’s value. Transfers between digital wallets do not need a bank, although some issuers can block tokens from being spent. In March 2025, Tether worked with the US government to freeze its dollar-pegged USDT tokens linked to the sanctioned Russian exchange Garantex.
A7, which Treasury says Iran’s Islamic Revolutionary Guard Corps has used to move funds, has its own rouble-pegged token, A7A5. The department describes the token’s use for internal accounting to record overseas bank payments, showing how digital assets can complement bank transfers. Even if a token cannot be frozen, exchanges can refuse to convert it into more widely accepted assets. In November 2025, Australian authorities flagged high-volume A7A5 transactions as a warning sign of sanctions circumvention.
Treasury’s Financial Crimes Enforcement Network has proposed barring US financial institutions from processing payments involving specified A7 companies. The agency named six publicly and would provide a fuller list confidentially to covered institutions. Washington should share account identifiers and customer evidence with financial intelligence agencies where A7’s companies bank, enabling investigators to compare company ownership and bank records and identify replacement fronts.
Secondary sanctions can pressure banks even where governments, such as Hong Kong’s, do not enforce US sanctions. That leverage should be used selectively, alongside coordinated investigations into suspected forgery or money laundering under local law to help banks distinguish prohibited payments from legitimate trade.
Cooperation can build on existing information-sharing arrangements. Singapore’s Cosmic platform lets participating banks share information on customers who show specified warning signs, while Hong Kong’s Finest lets banks exchange intelligence on suspected crime. The Australian Transaction Reports and Analysis Centre, Australia’s financial intelligence agency, has exchange agreements with its counterparts in both centres, giving Australia a role in linking evidence across borders.
As firms adapt to financial weaponisation, Washington should judge success by the prohibited business disrupted, not the legitimate customers banks abandon.
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