European Sanctions Enforcement

April 25, 2024 by Mark Handley

United Kingdom – HMRC issues £2.3m in compound penalties for sanctions and export controls breaches

His Majesty’s Revenue and Customs, the body empowered to enforce export controls and trade sanctions in the UK, has today published two Notices to Exporters setting out compound penalties in relation to Russian sanctions and export control violations.

The first Notice, in relation to an unnamed company, relates to a penalty of £1,058,781.79 imposed for breaches of the UK’s Russian sanctions regulation.

No information is given as to the nature of the conduct, the value of the goods, or why a criminal prosecution was not brought. There is no mention of a confiscation of the proceeds of crime.

The second Notice relates to export control violations that are not described as breaches of the UK’s sanction. Again no information is given as to the names of the companies, the nature of the violations, or an indication given as to the confiscation of the proceeds of crime.

To quote the Notice:

“The 6 settlements made by UK companies were:

- January 2024 – £12,700.00 was paid for a breach of licence conditions in relation to the export of military goods
- February 2024 – £33,822.64 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £971,726.00 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £139,841.85 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008 and dual use goods controlled by Retained Regulation 428/2009
- March 2024 – £92,817.40 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- March 2024 – £56,915.27 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008“.

April 24, 2024 by Mark Handley

Germany – investigation by Berlin prosecutor into “Russian House”

It is being reported today that the Berlin public prosecutor’s office is investigating whether the operations of the “Russian House” in Berlin are in breach of the EU’s Russian sanctions.

The “Russian House” is a scientific and cultural centre that was founded in the 1980s. It is being reported that the Zentralstelle für Sanktionsdurchsetzung (Central Office for Sanctions Enforcement) has concluded that is a “dependent branch” of the government body Rossotrudnichestvo, which has been designated in the EU since July 2022.

April 23, 2024 by Mark Handley

Luxembourg – CSSF imposes €785,000 fine for sanctions compliance failings

The Luxembourg financial services regulator, the CSSF, has today published a report of an administrative penalty imposed on Fuchs & Associés Finance SA.

The fine was €785,000.

Some of the compliance failings relate to AML and KYC more generally, and some were specific to sanctions. The sanctions-specific failings were:

- - “name screening controls aiming at detecting persons subject to prohibitions and restrictive measures in financial matters had not been carried out for all clients of the trading desk, as their names were not
    included in the databases used to feed the name screening systems”;
  - “the name screening tools were updated only once a week, and
    no additional controls were in place, particularly when new European and United Nations lists are issued”; and
  - “the absence of a complete and exhaustive client database”.

April 22, 2024April 22, 2024 by Mark Handley

Germany – charges laid in relation to exports to China

The German Federal Prosecutor’s office issued a press release earlier today in relation to the charging of three individuals for alleged export control violations.

The three charged are German nationals named as Herwig F., Ina F. and Thomas R.

It is alleged that the three were working for or on behalf of a Chinese intelligence agency and that they worked to procure information in relation to technology with military application, including ship engines.

The defendants are also charged with the unlicensed export of a laser to china in breach of the EU’s Dual-Use Regulation.

April 22, 2024 by Mark Handley

European Sanctions Enforcement – milestone of over 2000 announced and active investigations reached

With the recent news that Finland has increased the number of its ongoing investigations, Europe (meaning the EU, the UK, Switzerland, etc) has reached the milestone of over 2,000 ongoing and public sanctions enforcement investigations being undertaken by regulators and prosecutors.

No doubt there are other investigations which are ongoing in the countries shown on the graph, and no doubt there are investigations ongoing in countries not shown and which remain confidential.

How many of these will be dropped due to inconclusive evidence or exculpatory evidence, and how many will lead to a conviction or fine or acquittal is impossible to say.

It is, without question, an unprecedented level of enforcement.

April 22, 2024 by Mark Handley

European Central Bank set to order two EU banks to reduce Russian business

Reuters has reported that the European Central Bank is gearing up to order that the Italian Bank UniCredit must reduce its Russia-related business.

Reuters has also reported that the ECB is to similarly order Austria’s Raiffeisen bank to reduce its Russian lending by 65% and to reduce its involvement in Russia-related payments.

The ECB did not comment on either story.

The ECB has the power to fine non-compliance with such orders.

April 22, 2024 by Mark Handley

UK – Charity Commission investigates sanctioned person’s fundraising

The UK’s Charity Commission has issued a press release stating that it had launched a statutory investigation into the activities of Aozma Sultana who is designated under the UK’s terrorism sanctions.

The Charity Commission has confirmed that Aozma Sultana, by virtue of being a designated person, and so subject to an asset freeze, has been removed from any trustee or senior management role in the charity Gaza Now.

The Commission is also investigating the role of two companies, Aakhirah Limited and Al-Qureshi Executives is possible misappropriation of funds by the charity.

This is not the first action taken by the Charity Commission in relation to sanctioned trustee. In December 2023, it issued a press release in relation to action taken against Dr Viatcheslav Kantor who is designated under the UK’s Russian sanctions.

April 22, 2024 by Mark Handley

Germany – vessel which had cargo of Russian timber is released

In an earlier post we reported that the German authorities had seized a vessel in the Port of Rostock which was carrying a cargo of sanctioned birch timber from Russia. The planned destination had been the United States where the timber is not sanctioned but the ship had diverted to Rostock seemingly after technical troubles.

The vessel in question, Atlantic Navigator II, has now been allowed to leave Rostock.

The Customs authorities have not stated whether the timber remained on board.

The Rostock Public Prosecutor’s Office is also reported to have confirmed that the matter remains the subject of an ongoing investigation.

April 22, 2024 by Mark Handley

France – seizure of apartment owned by Russian designated person

Le Monde has reported that the French authorities have seized a property in Paris belonging to designated person Dmitry Peskov, President Putin’s spokesperson.

The seizure took place in December 2023. A villa in south-west France was seized at the same time with it said to belong to Artur Ocheretny, who is married to President’s Putin’s former wife. Mr Ocheretny is not designated under the EU’s sanctions.

It is being reported that the seizures are part of investigations relating to allegations of money laundering.

April 22, 2024 by Mark Handley

Finland – 40 further EU Russian trade sanctions investigations commenced

At the time of our earlier post in February the Finnish authorities were stating that they had 700 ongoing investigations into alleged breaches of the EU’s trade sanctions against Russia.

It is now being reported that they have “over 740” preliminary investigations into such breaches which suggests that a further 40 investigations have commenced in the interim.

No further details have been published on these new investigations.