July 2024 – Page 2 – European Sanctions Enforcement

July 15, 2024July 15, 2024 by Mark Handley

Netherlands – corporate fine and confiscation for company’s role in building Kerch bridge

The Dutch Public Prosecution Service has issued a press release relating to a settlement with the company Dieseko Group BV for its role in supplying equipment and expertise for the construction of the Kerch bridge in breach of the EU’s sanctions in relation to Crimea.

The prohibited activities took place during 2015 to 2016 and were uncovered through press reporting in 2017. An investigation was commenced in 2017 (see our earlier post) and then expanded to include Dieseko (see our earlier post).

The company exported equipment and machinery (via Finland but with the knowledge that the goods were to go to Crimea) and supplied staff to the site to provide technical assistance.

The company was given the maximum available fine per each of the three counts with a discount for its cooperation with the investigation for a fine of €180,000. The cooperation includes document production and making staff available for interview.

The company has also had its entire “gain” from its work on the bridge confiscated of €1.6m. It is not entirely clear if this is gross or net profits.

The company has put in place remediation and compliance measures. The senior management of the company were interviewed as part of the investigation but will not be prosecuted as two have since passed away and one is seriously ill.

For the Statement of Facts see here.

For the Settlement Agreement see here (in Dutch).

The Dutch version of the Press Release includes comment that the Dutch intend to prosecute another company and several individuals for their involvement in the building of the Kerch bridge.

July 15, 2024 by Mark Handley

Czechia – conviction, fine and confiscation for export of luxury cars to Russia

It is being reported (and here) that the Czech authorities have obtained a conviction of Vladimir Lihutin, a Czech national, for an attempt to export three luxury cars to Russia.

The sentence includes:

- a fine of 300,000 crowns (c. €11,500)
- confiscation of €132,000 (being the sums paid by the customers for the cars)
- a ban on buying and selling any cars for 20 months.

This is the first known conviction or fine imposed in Czechia for breaches of EU sanctions.

July 12, 2024 by Mark Handley

Luxembourg – CSSF imposes fine for AML and sanctions compliance failings

The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg has imposed fines of €109,000 and €17,200 for compliance failings on abrdn Investments Luxembourg S.A.

The fine of €17,200 related to failings in relation to AML/CFT, and included in these failings was failure to “perform initial name screenings controls against international and European financial sanctions lists”.

The CSSF had conducted on-site inspections in 2020.

July 11, 2024 by Mark Handley

Netherlands – conviction for making funds available to designated person under Dutch sanctions

The District Court of Rotterdam has convicted an individual on one count of making funds (€350) available to a person designated under the Dutch Terrorism Sanctions Regulations 2007.

The defendant was acquitted of another charge of making funds available to ISIS on the basis of a lack of evidence that the defendant knew the recipient was connected with ISIS and because the transfer had taken place after ISIS had been largely defeated in Syria.

The individual was sentenced to 60 hours of community service, although this time had already been performed by virtue of a lengthy pre-trial detention.

July 11, 2024July 12, 2024 by Mark Handley

France – Russian vessel barred from entering the port of Brest

It is being reported that the French port of Brest has barred the Russian vessel Shtandart from entering thereby enforcing the EU’s prohibition on Russian vessel entering EU ports.

The vessel has been re-flagged to the Cook Islands but remains operated by Russians. It is a modern replica of a frigate of Tsar Peter the Great which was sailing to Brest to take part in the Maritime Festival.

The same report notes that the vessel had previously been in another French port at La Rochelle.

July 11, 2024 by Mark Handley

Lithuania – company operating crypto exchange fined €8.23m for EU sanctions violations

Lithuania’s Financial Crimes Investigation Service has imposed a fine of €8.23m for breaches of the EU’s sanctions and a fine of €1.06m for breaches of Lithuania’s Law on the Prevention of Money Laundering and Terrorist Financing.

The company fined is UAB Payeer. The press release notes that the company did not cooperate with the investigation and did not provide responses to questions raised.

The investigation commenced after an inspection in 2023 that was conducted after Payeer commenced its operations in Lithuania.

Payeer operated a crypto exchange at Payeer.com which allowed customers to make transfers to or from Russian banks that were designated under EU sanctions.

The AML fine relates to the failure to conduct KYC and the failure to report suspicious transactions.

The press release notes that Payeer had revenues of more than €164m during the 1.5 years of its breaches, but does not note what proportion of this came from prohibited activity.

July 9, 2024 by Mark Handley

UK – HMRC criminal investigation into alleged exports of perfume to Russia

In a civil judgment handed down earlier this week, it was revealed (at paragraph 63) that an individual, David Crisp, was arrested by HMRC on 10 October 2023 and electronic devices were seized.

The allegation is that companies managed by Mr Crisp were knowingly exporting perfume to Russia in breach of the UK’s sanctions.

As of the date of the judgment, HMRC had confirmed (at paragraph 69) that the criminal investigation remains ongoing but so far no charges have been made and Mr Crisp is no longer on bail.

The judgment itself is of note for the Court removing Mr Crisp as a director of the relevant companies on the basis that there was a “strong prima facie evidential basis for the allegations” of breaching the UK’s sanctions. The orders were a form of interlocutory relief as part of an unfair prejudice petition brought by another of the shareholders of the companies.

July 5, 2024 by Mark Handley

UK – National Crime Agency applies for confiscation order for £1.1m

The UK’s National Crime Agency has applied to confiscate £1.1m in frozen funds owned or controlled by Petr Aven on the basis that the funds in question are the proceeds of crime for being the proceeds of suspected breaches of the UK’s Russian sanctions.

It is being reported that the funds were first frozen by a court order in May 2022. The money is said to have been used in transactions by Ekaterina Kozina, Petr Aven’s wife, and Stephen Gater, Aven’s “representative”.

July 5, 2024 by Mark Handley

Latvia – corporate fine for import of possible Russian timber

The Latvian State Forest Service (VMD) has fined a company €10,000 in relation to timber which may have been sourced from Russia.

The fine was imposed on the basis of the EU’s Timber Regulation and the failure of the company to properly conduct due diligence on timber that may have been Russian in origin which would render the timber as illegally sourced.

It is being reported that the VMD has taken the view that the importer needs to be able to positively exclude the possibility that the timber is of Russian, or Belarusian, origin.

July 4, 2024 by Mark Handley

Germany – fine for the captain of distressed vessel which took Russian timber into German port

Further to our earlier posts about the detention and subsequent release of the vessel the Atlantic Navigator II which carried, amongst other cargo, birch timber of Russian origin into the German port of Rostock.

It is now being reported that the Captain of the vessel has received a fine which he was directed by the Public Prosecutor’s Office to pay to the charity Human Rights Watch.

The fine was €8,000, which no doubt reflects the fact that the vessel only entered German waters after experiencing technical difficulties.