July 2024 – European Sanctions Enforcement

July 31, 2024 by Mark Handley

UK – investigation by HMRC into potential Airbus violations of export controls

Reuters has reported that Airbus’s most recent half-yearly financial statements include reference to an ongoing investigation by HMRC.

Under the heading “HMRC Export Control Investigation”, the financial company records: “Airbus is fully cooperating with an investigation by the Revenue and Customs Authority of the United Kingdom into possible violations of the United Kingdom’s export control rules. It is not expected that the resolution of this matter will have a material financial impact“.

No further details are provided.

July 31, 2024 by Mark Handley

Luxembourg – Financial Crime Unit’s report of sanctions investigations

Luxembourg’s Financial Intelligence Unit (the CRF) has published its Annual Report which includes statistics on sanctions-related SARS and investigations, as well as an indication of funds frozen as part of these investigations.

- 160 instances of suspicion of breaches of sanctions reported since 24 February 2022:
  - 23 were in 2022;
  - 100 were in 2023; and
  - 36 so far in 2024
- 15 information requests have been sent out by the CRF in relation to possible sanctions evasion:
  - 2 in 2022;
  - 13 in 2023; and
  - no indication of the number sent so far in 2024.
- the CRF has also blocked €45,958,887.91 in relation to two suspected cases of sanctions evasion. No further details were provided.

July 29, 2024August 1, 2024 by Mark Handley

UK – confiscation of more than £750,000 from family and estate of Petr Aven

It is being reported that the UK’s National Crime Agency has completed the confiscation of funds related to Petr Aven.

The sum of £750,000 was confiscated from bank accounts held in the name of Petr Aven’s wife and others.

A sum of cash initially recovered by the NCA from a residence outside London was also confiscated.

The funds were confiscated under the Proceeds of Crime Act 2002.

Updated on 1 August to reflect issuance of NCA’s press release:

The NCA has stated that the funds, totalling £783,827.34 were held for the benefit of Petr Aven although not in his name, and that the breaches of sanctions giving rise to the funds being the proceeds of crime were: “Attempts to relocate the funds, as well as transactions made after March 15 2022 by Aven’s estate manager, Stephen Gater … . These included the payment of salaries to over 20 members of Aven’s household staff, and the sale of a Bentley Bentayga worth £160,000“.

July 23, 2024August 1, 2024 by Mark Handley

UK – extradition to the US for person suspected of Iran sanctions breaches

A press release from the US Department of Justice records that an individual, Saeid Haji Agha Mousaei, was arrested in the UK on 24 January 2023 pursuant to an Interpol diffusion notice.

Mr Mousaei was then subsequently extradited to the US where he faces multiple charges arising from the alleged supply of “controlled electronics with military applications, including signals equipment like oscilloscopes and spectrum analyzers, for export and re-export to Iran”.

It is alleged that false documentation was prepared which indicated that the goods were to remain in countries such as the UAE and Armenia, but the goods were all transshipped to Iran via the UAE.

July 23, 2024January 15, 2025 by Mark Handley

UK – two law firms reported to OFSI by legal regulator

It is being reported that two law firms have been reported by the Solicitors Regulation Authority (SRA) to the UK’s OFSI.

It is alleged that the law firms were facilitating financial transactions valued at more than £300,000. It is unclear whether the conduct relates to designated persons, trade sanctions, or the UK’s prohibitions on Russian investment.

The attention on law firms chimes with the report yesterday that there has been an investigation in Germany relating to a potential breach of the EU’s prohibitions on legal advice.

July 22, 2024July 22, 2024 by Mark Handley

Germany – sanctions enforcement statistics: at least 1988 investigations since February 2022

The German media outlet Südwestrundfunk has conducted a survey of Germany’s state justice ministries, public prosecutors office and the Federal Prosecutor’s Office to compile statistics on recent sanctions investigations in Germany.

The vast majority of these are said to relate to Russian and Belarusian sanctions although enforcement of other regimes is included.

The results are:

- Saxony – 451 investigations
- Bavaria – 448 investigations
- Hesse – 406 investigations
- Hamburg – 161 investigations
- Schleswig-Holstein – 112 investigations
- Brandenburg – 107 investigations (of which 38 discontinued)
- Bremen – 103 investigations
- Baden-Württemberg – 90 investigations (of which 52 in Stuttgart, of which 44 discontinued)
- Rhineland-Palatinate – 73 investigations (of which 50 discontinued)
- Saarland – 21 investigations
- Mecklenburg Western Pomerania – 9 investigations
- Thuringia – 7 investigations

This is a total of 1,988 investigations conducted since 24 February 2022. No data were reported for the states of Lower Saxony or Anhalt, so this figure is not complete.

In September last year (see earlier post) it was reported that there were 150 on-going investigations in Germany. The new survey reports a minimum of 176 investigations now reported as ongoing, although many regions did not provide a figure for currently ongoing investigations.

July 19, 2024July 19, 2024 by Mark Handley

Poland – investigation and charge in relation to dual-use exports to Iran

It is being reported by Reuters that the Polish state-owned company WSK Poznan is being investigated by the National Prosecutor’s Office and the Internal Security Agency on suspicion of supplying parts to Iranian manufacturer, Motorsazan Company, which were then incorporated into drones used by Russian combat forces in Ukraine.

The National Prosecutor’s Office is also reported to have charged the CEO of the company in relation to the export of dual-use goods.

Another report states that the investigation has been ongoing for two years, and notes that the Polish National Prosecutor has denied evidence that parts were used for drones and stated that the investigation relates more to the sale of fuel pumps to Iran.

July 18, 2024July 18, 2024 by Mark Handley

Switzerland – updated sanctions enforcement statistics with 5 new fines

Switzerland’s SECO has updated its Russian and Belarusian sanctions enforcement statistics. The previous update was in February 2024 (see our previous post).

The reported new data states that SECO has brought:

- 56 administrative criminal proceedings (up from 47 in February);
- 41 of which have been finalized (up from 29 in February);
- including 26 discontinuation orders (up from 20 in February);
- 14 penalty notices (up from 9 in May when these were published on this blog here, here, here and here); and
- 1 penalty order (this is case 6 previously published on this blog here).

Accordingly, SECO has started 9 new criminal administrative proceedings since February 2024, and imposed 5 new fines since May of this year.

July 18, 2024 by Mark Handley

Poland – updated enforcement statistics with new proceedings and new fines

The Polish authorities have released updated enforcement statistics showing changes since those release just a few weeks ago.

The new data confirms:

- 51 administrative proceedings commenced (up from 48 on 1 July)
- 37 final decisions taken (up from 33 on 1 July)
- 24 fines imposed to date (up from 22 on 1 July)

Further, in response to a Freedom of Information request made on behalf of this blog, the Polish Ministry of Finance has provided the following data (available here: MF do M. Handley’a odpowiedź na wniosek 2879.2024):

- 12 of the fines imposed for breaches of EU Regulation 833/2014 with a total of fines of 1,513,244.00 zloty (c. €353,326);
- 2 of the fines imposed for breaches of EU Regulation 269/2014 with a total of fines of 451,946 zloty (c. €105,000); and
- 10 of the fines imposed for breaches of the Polish 2022 sanctions regulation for total fines of 18,868,137 zloty (c. €4,405,000).

No other European country has imposed so many fines for breaches of Russian sanctions.

July 18, 2024July 22, 2024 by Mark Handley

Germany – two individuals convicted of electronics exports to Russia

A court in Stuttgart has convicted two individuals for their role in the export of 120,000 dual-use items to Russia between January 2020 and May 2023. The parts included those used for the “Orlan 10” drone. The value of the goods was estimated at €875,000. Another report states that this amount was confiscated as part of the sentencing.

One individual was given a custodial sentence of 6 years and 9 months and the other was given a suspended sentence of 1 year and 9 months.

The scheme had involved disguised sales and invoices involving Hong Kong and Turkey, as well as false documents indicating that some of the goods had been sold to customers in Germany.

As per our earlier post, the individuals were charged had been charged in March 2024.