European Sanctions Enforcement

July 1, 2024 by Mark Handley

Germany – raids and arrests for suspected exports of luxury cars to Russia in breach of sanctions

On Friday the Customs office in Frankfurt raided and searched 24 residential and business premises mostly in Offenbach am Main and Aschaffenburg although Customs said the network extended across Germany. Four individuals were arrested. The actions were part of an investigation into the suspected export of luxury cars to Russia in breach of EU sanctions.

The individuals arrested were aged between 39 and 44 with one woman and three men.

The allegation is that 170 luxury cars had been exported since 2022.

Five cars were seized as part of the raids along with evidence and €300,000 in cash. In addition a freezing order was obtained over €13.3m in bank accounts said to be the profits from the enterprise.

The German authorities have been particularly active in enforcement related to luxury cars of late:

- - 28 June: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/06/28/germany-raids-on-seven-premises-as-part-of-sanctions-investigation-into-car-exports/
  - 7 June: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/06/07/germany-raids-on-luxury-car-exporters-to-russia/
  - 8 May: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/05/08/germany-individual-convicted-for-exporting-luxury-cars-to-russia-in-breach-of-eu-sanctions/
  - 6 March: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/03/06/germany-three-arrested-for-exporting-luxury-cars-in-breach-of-russian-sanctions/

July 1, 2024 by Mark Handley

Poland – sanctions enforcement statistics including 20 fines to date

As part of the press article (behind a paywall) on the recent fines against Novatek Green Energy and Geleo (see our post here), the Polish authorities have also provided an update on their enforcement activity more broadly.

- - Total administrative proceedings commenced: 48
  - Final decisions to date: 33
  - Declination or waiver of fine or finding of no breach: 13
  - Fines imposed to date: 20
  - Ongoing proceedings: 15
  - Total fines to date: 4.8m zloty (c. $1.2m)

Certainly the figure for total fines does not include the fine against Novatek Green Energy (which was 12 million zloty), but it is also a little unclear whether or not the figure includes the fine against Geleo (which was 4m zloty).

The report also notes that most of the 20 penalties have been imposed in 2024, with only two imposed by the end of 2023 for a combined total of 71,000 zloty (c. $17,700).

These enforcement actions appear to relate to a mix of EU and the separate Polish sanctions.

No information has been provided as to the conduct which gave rise to the fines, or who the fines were imposed on.

July 1, 2024July 1, 2024 by Mark Handley

Poland – fines imposed on two companies for circumvention of Russian sanctions

Now updated from the post first published on 28 June.

It is being reported (behind a paywall) that the Malopolska Customs and Tax Office of Krakow has imposed fines of 12 million zloty (c. €2.78m) against Novatek Green Energy and 4 million zloty (c. €927,000) against employee-owned company Geleo.

The fine against Geleo was imposed on 31 May. It was for breach of the relevant asset freeze and for circumvention of Polish sanctions. The transaction in question was the purchase, for €1, of 100% of the shares in Novatek Green Energy from the Swiss company Novatek Gas and Power GmbH, which in turn is a direct subsidiary of the Russian company OAO Novatek.

The fine against Novatek Green Energy was imposed on 25 June, and was imposed for multiple transactions in breach of the imposed asset freeze.

With particular thanks to Dr Marcin Łukowski who provided a copy of the relevant article.

June 28, 2024 by Mark Handley

Italy – investigation into financial transfers to Russia

As part of its Annual Report, the Unità di Informazione Finanziaria per l’Italia within the Bank of Italy has announced investigations into suspicions of illicit money flows from Italy to Russia via third countries.

No further details are available at this time including the amounts at stake, the identities of the third countries, or whether a referral has been made to the criminal authorities.

It is also unclear whether the transfers are alleged to have been made for or on behalf of designated persons.

June 28, 2024 by Mark Handley

Germany – raids on seven premises as part of sanctions investigation into car exports

On Wednesday more than 60 officers from customs offices and prosecutors raided seven premises in Germersheim in the Rheinland-Palatinate region.

The investigation relates to the export of approximately 190 luxury cars to Russia valued at €4.5m, with the exports conducted via Kazakhstan, Kyrgyzstan, Belarus and Turkey.

As well as evidence significant amounts of cash were seized and attachment orders have been obtained over bank accounts and real estate.

June 25, 2024 by Mark Handley

Norway – investigation into ship-to-ship transfers of fish

It is being reported that the Norwegian Coast Guard conducted an investigation in May into possibly unlawful ship-to-ship transfers of fish between a Russian and a Norwegian vessel.

The transfers involve fish caught by the Russian vessel which cannot then land the fish in the EU, and so engages in a ship-to-ship transfer of the fish to a Norwegian vessel which then landed the fish in the Netherlands.

As there are no import prohibitions in the EU in relation to Russian fish, and the relevant prohibition is the entry into an EU port of a Russian vessel, the report notes that the Norwegian authorities concluded that no breach had occurred.

June 25, 2024 by Mark Handley

Italy – seizure of Russian-origin military cargo bound for Libya

It is being reported that the Italian authorities, upon receipt of information from the US authorities, have conducted an operation in the Mediterranean to seize millions of dollars in unspecified military equipment on board the MSC Arina.

The goods are suspected of being exported to Libya in breach of the arms embargo that forms part of the UN sanctions.

The vessel had departed Shenzen, China in April and was allowed to continue after the cargo in question was removed.

It is being reported that the equipment was destined for General Khalifa’s forces in eastern Libya.

June 17, 2024June 17, 2024 by Mark Handley

Netherlands – Attorney-General’s advice to uphold conviction and custodial sentence for ISIS sanctions violation

The post below has been updated on 17 June 2024 after the helpful input from the Sanctions Unit of the Dutch Ministry of Foreign Affairs:

Further to our earlier post, in late 2021 the Dutch Court of Appeal sentenced an individual to a six month custodial prison term for a number of offences including for making a payment in breach of the EU’s ISIS sanctions.

In his advice to the Dutch Supreme Court has upheld the Attorney General has advised that the convictions for terrorist financing and breaching the Dutch Sanctiewet 1977 be upheld, but that the conviction for money laundering be remanded to the Court of Appeal.

The facts relate to the transfer of €471 from an individual to his brother who was in Syria as part of ISIS. The defence sought to argue that the man did not have the required intent to support terrorism, or knowledge that the funds had benefitted ISIS.

As stated by the Attorney General at [2.9]:

“With regard to the violation of the provision of Article 2 of the Sanctions Act 1977, the offense proven under 2, the suspect’s intent does not have to be aimed at non-compliance with the legal regulations referred to in the finding of proof. The suspect’s intention must be aimed at ensuring that the money ends up indirectly with (a) terrorist organization”.

June 14, 2024 by Mark Handley

Italy – arrest of individual who assisted avoidance of extradition to US

Further to our earlier post, it is being reported that the Italian authorities have today arrested a Russian national on suspicion of providing assistance to Artem Uss who fled Italy after a court had ordered his extradition to the United States to face charges relating to breaches of US sanctions against Venezuela.

The individual has been identified as Dmitry Chirakadze who was arrested at Rome’s airport.

June 7, 2024 by Mark Handley

Germany – raids on luxury car exporters to Russia

It is being reported (in German and English) that the Customs Investigation Office in Essen and the Public Prosecutor’s Office in Bochum conducted raids on two premises including on a luxury car dealership on suspicion of exporting more than €5 million in cars to Russia.

The allegations include that fictitious destinations for the exports were put forward when the real destination was Russia.

Evidence and cars were seized as part of the raids.