A7 sanctions evasion scandal highlights need for continuous monitoring – SmartSearch
22 September 2026
SmartSearch warns regulated firms must move beyond static compliance checks as Kremlin-backed network demonstrates how sophisticated sanctions evasion can exploit legitimate financial infrastructure
- FT investigation finds A7 funnelled more than $6.9bn through the international banking system despite sanctions on Russia
- SmartSearch warns the case highlights the need for continuous sanctions monitoring
- SmartSearch research finds 96% of UK regulated firms see geopolitical factors as a major compliance concern, with state-sponsored attacks and changes to sanctions and embargoes among the biggest risks
- 87% of businesses would cut ties with a business following a single compliance failure
The scale and sophistication of the A7 sanctions evasion network highlight the growing challenge facing regulated firms as illicit financial activity increasingly exploits legitimate international financial infrastructure, warns SmartSearch, a UK anti-money laundering technology company. The case underscores, more than ever, the importance of ongoing sanctions monitoring.
An investigation by the Financial Times found that Kremlin-backed fintech A7 had funnelled more than $6.9bn through the international banking system, despite sanctions on Russia. A7 were found to have used a network of front companies and existing businesses to access the SWIFT system, alongside counterfeit invoices.
The findings come as the National Crime Agency (NCA) and UK Government have issued an industry-wide alert on A7, warning that the network relies on third-country financial institutions and the illicit use of the international financial system to circumvent sanctions. The NCA says A7 claims to have settled more than $86bn of transactions within its first year of operating, with the FT-tracked $6.9bn representing the activity identified specifically through the international banking system.
Phil Cotter, CEO at SmartSearch, said:
"What the Financial Times investigation has laid out is staggering in scale, and the picture only gets more serious when set against the official position. In August 2026, the National Crime Agency issued a Flash Alert, working in conjunction with HM Treasury's Office of Financial Sanctions Implementation and the FCDO, confirming that A7 claims to have settled more than $86 billion within its first year of operating. That is not a fringe operation. It is a state-backed alternative value transfer system operating at a scale that touches the international financial system.
"The specifics of how the activity moved are, according to the NCA, a combination of shell companies acting as sub-agents in third-country jurisdictions, false invoices manufactured to give a façade of legitimacy, correspondent banking relationships used to move funds between jurisdictions, and, as the NCA itself notes, the exploitation of SWIFT to route transactions once the funds have been introduced into the system. This is not a failure of any single institution. It is a highly sophisticated, deliberately layered exploitation of legitimate financial infrastructure, using techniques that are consistent with well-documented trade-based money laundering typologies."
The case also demonstrates the wider geopolitical dimension of sanctions evasion. The NCA has linked A7 to sanctioned Russian state-owned bank Promsvyazbank and Russian state development corporation VEB.RF, and says its clients include "some of Russia's most important players in the military-industrial complex". The NCA has also raised the possibility that A7's activity may involve proliferation financing.
Phil adds: "The money moving through this network is not abstract. It funds activities that cause direct human harm, including the sustainment of state-level violence and the erosion of the international rules that exist to protect ordinary people from geopolitical conflict. Compliance conversations that focus only on the regulatory and financial dimensions understate what is actually at stake."
For regulated firms, the case also comes against a backdrop of growing concern about geopolitical risk. SmartSearch's report, The State of Compliance in 2026, based on a survey of 1,000 senior decision-makers across UK regulated sectors, found that 96% identify geopolitical factors as a major influence on their compliance strategies over the next 12 to 18 months. State-sponsored attacks were identified as the single biggest geopolitical risk by 16% of respondents, while 11% pointed to changes in international sanctions and embargoes.
"This is not a theoretical concern for regulated firms,” he said. “Our data reveals that the vast majority of UK regulated firms see geopolitical factors as a major compliance concern, with state-sponsored attacks and changes to sanctions and embargoes among the biggest risks. Firms have been telling us for months that they see this coming. The A7 case is a live example of what they have been worried about."
The challenge extends beyond sanctions screening alone. Complex ownership structures, changing counterparties and emerging adverse media can create risks that are difficult to identify through periodic checks, as Phil explains: "There is a wider risk that regulated firms and policymakers need to be alert to. Illicit financial flows at this scale are rarely just about moving money. Where they persist, they create the conditions for political influence to be bought, for public discourse to be shaped by actors outside the reach of democratic accountability, and for the integrity of institutions that ordinary citizens rely on to be gradually eroded. This is the wider systemic risk that patterns like this one point to."
SmartSearch says firms involved in international payments, international customers or cross-border ownership structures need to ensure their compliance processes can identify changing risks rather than relying solely on checks carried out at onboarding.
"The lesson for every regulated brand that touches international payments, international customers, or cross-border ownership structures is straightforward,” said Phil. “The tools to detect this kind of activity exist. Continuous sanctions screening, PEP monitoring, beneficial ownership checks and adverse media screening can all help identify emerging risks, alongside vigilance around the red flags the NCA has now published. Our research found that 54% of identity checks are still being done manually, and 52% of firms struggle to verify beneficial ownership across complex ownership structures. A customer who was low-risk at onboarding six months ago may not be low-risk today. Geopolitical conditions change faster than annual review cycles."
The UK Government says its A7 response forms part of wider international action against sanctions evasion, including UK, US and EU designations and Operation DESTABILISE.
"The good news is that the international system is now visibly catching up," said Phil. "The NCA Flash Alert, the UK, US and EU designations against A7 and its affiliates, the wider Operation DESTABILISE work, and the Joint Money Laundering Intelligence Taskforce framework all point to a coordinated response building at pace. But this pattern is not going away. As sanctions regimes tighten, as geopolitical tensions rise, and as the tools available to bad actors become more sophisticated, the incentive to find and exploit gaps in the international financial system will only increase. Regulated firms should expect more cases like this to surface, not fewer."
The commercial consequences for regulated firms are also significant, with SmartSearch's research finding that 87% of businesses would sever ties with a brand following a compliance breach.
He concludes: "The consumer and business dimension matters too. Trust in regulated brands is fragile, and it does not recover easily. Our research found that almost nine in ten businesses would sever ties with a brand after a compliance breach. That is not a hypothetical consequence. It is a measurable commercial one. For every regulated firm that does not yet have continuous monitoring in place, the question is not whether the next incident will come, but whether the firm will be caught up in it when it does."
