Mark Handley – Page 13 – European Sanctions Enforcement

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.

April 19, 2024 by Mark Handley

UK – Government Minister gives timelines for first post-2022 financial sanctions fines

The Parliamentary website has today published a letter from Minister Anne Marie Trevelyan MP to the Chair of the Foreign Relations Committee which includes a section on the current state of UK sanctions enforcement. The letter is part of a report by the Committee.

In relation to sanctions enforcement the letter indicates that the first fines for breaches of sanctions imposed since 2022 are expected this year.

The section of the letter can be quoted in full below:

“Fines for non-compliance

Secondly, regarding the number of fines that have been issued for non-compliance with our Russia sanctions regime, I can confirm that there have been 10 Monetary Penalties imposed by OFSI since it received the power to impose these in 2017, totalling £22m.

OFSI cannot pre-determine case outcomes but does expect to see the first Monetary Penalties resulting from 2022 Russia designations come to fruition in 2024. This is in line with other jurisdictions, including the US, given the time it takes to properly investigate cases.

Financial sanctions breaches are often complex and investigations proportionately long. OFSI is responsible for both investigating breaches and deciding on the appropriate outcome, including initial penalty amounts. There are several important statutory periods to allow for representations and appeals that OFSI must comply with that also impact the time between investigations commencing and penalties being made public.

Some breaches are found to be relatively minor in nature. In these cases, OFSI will not necessarily impose a penalty, as it may be more appropriate to deal with the case in a different way such as a warning letter or referring the matter to a regulator. In 2022-2023, OFSI recorded 473 suspected breaches of financial sanctions (excluding oil price cap and counter-terrorism breaches). This is a significant increase on the 147 cases recorded in 2021-2022. This increase was expected given the scale of increased Russia sanctions, and OFSI has increased its enforcement capacity in response.”

April 19, 2024 by Mark Handley

Netherlands – four month prison sentence for breach of ISIS sanctions

The Court of Appeal in the Hague has quashed some convictions and upheld others of a suspect charged with terrorist financing and with breaching the EU’s ISIS sanctions.

The underlying actions were the indirect transfer of approximately €4,550 in several tranches to the suspect’s daughter and son-in-law who were then in Syria as part of ISIS.

The Court of Appeal quashed the convictions for terrorist financing saying there was no evidence that that was the suspect’s intention.

The convictions under the EU’s sanctions were, however, upheld with the court noting that intention does not form part of the offence which consists simply of making funds or economic resources available to a designated person.

The defendant was given a four month custodial sentence.

April 16, 2024 by Mark Handley

Netherlands – company convicted of sanctions breaches ordered to be liquidated

As per our earlier post, in November last year the Public Prosecution Service in the Netherlands applied to wind up a company convicted of breaching the EU’s sanctions by unlawfully exporting goods to Russia.

Yesterday, the District Court of Gelderland issued its order and judgment in the case. The court granted the application to wind up the company and appointed a liquidator to oversee the process.

The court noted that the company had ceased to trade and that its director and shareholder (also convicted) had fled the Netherlands for Russia.

The court did not grant the Prosecution’s application to immediately turn over all funds in the company’s bank accounts as the proceeds of crime. Rather the court has left the question of what funds are the proceeds of crime “to the liquidator to make an independent assessment”.

The case is an illustration of the powers available to courts post-conviction.

April 15, 2024 by Mark Handley

Cyprus – company raided as part of sanctions investigation

Last week the compliance and oversight department of the Cyprus Bar Association raided the premises of the company Finsol controlled by a Greek national regulated by the CBA.

The raid is part of a wider investigation which includes the Cypriot Anti-Money Laundering Authority and Cyprus police.

While the investigation includes allegations unrelated to sanctions, part of the investigation, further to our earlier post, includes allegation of back-dated asset transfers in relation to the company Santinomo Limited, allegedly in an attempt to avoid the impact of a new designation.

April 12, 2024 by Mark Handley

Poland – sanctions investigation commenced into state-controlled oil trading company

After first being reported by Polish radio station Radio Zet, it is now being reported in the press that the Polish Special Services has commenced an investigation into whether the Swiss oil trading subsidiary of a state-controlled oil company has breached the EU’s Russian sanctions in relation to oil.

The Polish parent company is Orlen, which is 49% owned by the Polish state, and the Swiss subsidiary is Orlen Trading Switzerland.

It is alleged that the Swiss subsidiary was incorporated in Switzerland in late 2022 ahead of the relevant changes to EU sanctions which came into effect in early 2023 as a means of continuing to purchase and trade in oil of Russian origin.

The companies are reported as having denied the allegations.

April 11, 2024 by Mark Handley

Latvia – investigation into bunkering vessel refueling Russian “shadow fleet”

A vessel owned by a Latvian company is providing bunkering (i.e. refueling) services to the Russian “shadow fleet” in the Baltic sea off the coast of Gotland in Sweden.

A spokesman for the Latvian Foreign Ministry has stated that an investigation is now underway to see if the Latvian company is breaching or circumventing EU sanctions, in particular whether the fuel being supplied is of Russian origin.

The Latvian company, Fastbunkering, denies breaching sanctions.

It is noteworthy that just two days ago the Swedish authorities were reported as having closed an investigation into these same possible breaches of sanctions.

A Swedish prosecutor was reported as having stated: “I have made the assessment that it is not worth requesting legal aid from Latvia because it is not expected to lead to a higher penalty than a fine“.

April 11, 2024 by Mark Handley

Cyprus – more than 40 ongoing Russian sanctions investigations and first indictments expected soon

The Cypriot authorities have more than 40 ongoing criminal investigations related to alleged breaches of the EU’s Russian sanctions.

It is being reported that yesterday the current status of “all open cases exceeding 40 were reviewed” by the Law Office and the state’s Attorney General, with the Office for Economic Crime Investigation.

It is also being reported that for the completed investigations “indictments will be prepared to initiate criminal prosecutions in court”.