IRS, Dutch and UK experts teach Ukrainian law enforcement how to catch sanctions evaders

Officials from the United States, United Kingdom and Netherlands completed their latest training session with Ukrainian law enforcement officers this week in an effort to help them trace cryptocurrency and blockchain transactions.

The IRS Criminal Investigation worked alongside the Dutch Fiscal Information and Investigation Service (FIOD) and His Majesty's Revenue and Customs (HRMC) to virtually offer their expertise to 40 Ukrainian law enforcement officers over four days this week.

The virtual training focused on money laundering, fraudulent cryptocurrency transactions and blockchain forensic investigations.

Several companies, including blockchain research firm Chainalysis, have published data showing that pro-Russian military groups have taken in millions through cryptocurrency, while Russia’s military and business leaders continue to exploit crypto platforms to evade sanctions.

“I regularly tout the importance of public-private partnerships, and the trainings we’ve delivered to our Ukrainian law enforcement partners are real life examples of how government agencies and the private sector have come together on a global level to curtail sanction evaders,” IRS CI Chief Jim Lee said in a statement.

The government agencies worked with two blockchain analytics companies — CipherTrace and BlockTrace — during the training, and participants came from several different Ukrainian law enforcement agencies, including the Cyber-Police Department of National Police of Ukraine, Ukraine’s State Bureau of Investigation, among others.

Niels Obbink, director general of the Dutch Fiscal Information and Investigation Service, explained that it was important for international partners to continue sharing knowledge to contribute to greater know-how to counter cybercrime.

The first training session took place in May and was conducted alongside Chainalysis, focusing primarily on ways investigators could target financial networks used by sanctions evaders who attempt to conceal their assets.

The IRS said in a statement that it is currently in the midst of 30 sanctions investigations and is actively working with the Office of Foreign Assets Control to freeze assets controlled by anyone facing sanctions. In May, a Dubai-based firm was sanctioned along with 22 individuals and 104 entities operating in 20 countries for their role in facilitating Russian sanctions evasion.

The IRS-CI currently has 12 attachés posted abroad that work with foreign law enforcement agencies on investigations, including one at Europol headquarters in the Netherlands that focuses only on cyber-related issues.

Four more cyber attachés were deployed earlier this year to help train agencies in partner nations. The four were sent to Sydney, Bogota, Frankfurt, and Singapore for a 120-day detail from June to September 2023.

“In order to effectively combat cybercrime, we need to ensure that our foreign counterparts have access to the same tools and expertise we have here in the United States,” Lee said.