It is being reported that a Russian national, who was formerly an employee of chip manufacturer ASML, and of Mapper Lithography, is being prosecuted for both breach of EU sanctions and for theft of trade secrets.
The man is currently in custody. As part of the prosecution the individual has been banned from travel to the Netherlands for 20 years.
The man is alleged to have stolen documents, such as microchip manuals and passed those to Russian recipients to aid microchip production.
It is being reported that the Kurzeme District Court has sentenced the Latvian citizen Valentins Rozencovs, to 2 years in jail.
The sentence was that sought by the prosecution, although the case is subject to appeal.
Rozencovs was the editor-in-chief of Sputnik Latvija which is the Latvian branch of Sputnik which operates under the umbrella of a Russian state-owned media company Rossiya Segodnya.
The Director General of Rossiya Segodnya is a designated person (Dmitry Kiselyov), and the prosecution was based on the premise that the provision of services by Valentins Rozencovs was making economic resources available to a designated person, and that Sputnik Latvija was “owned or controlled” by Kiselyov.
This is the latest in a series of prosecutions relating to Rossiya Segodnya – see our earlier posts, here and here.
The Rotterdam District Court has issued two judgments relating to the conviction and sentencing of an individual for exporting computer goods and software destined for Russian companies via intermediaries in Kazakhstan, Kyrgyzstan and Uzbekistan.
According to the judgment convicting the individual, the man had been selling computer equipment to two Russian companies prior to 2022. After the goods in questions became sanctioned, a fact he was made aware of by his customs agent, the man directed the exports to affiliates of his Russian customers in Kazakhstan, Kyrgyzstan and Uzbekistan. All the communications, however, remained with the Russian companies.
In an attempt to cover his tracks the man forged a contract between his company and the central Asian entities and provided this in response to questions from his bank.
The court convicted him of the charges, including forgery, holding that the EU Regulations did not require proof that the goods were actually delivered to Russia.
The exports in question were of thousands of items which were either dual-use or luxury goods and were predominantly computer equipment and software.
At sentencing the court made a number of comments:
The man was given a custodial sentence equivalent to the length of his time served in pre-trial detention (450 days), a suspended sentence of just over 11 months, suspended for two years, and a community service order of 240 hours.
Goods which had been seized during the investigation were returned to him.
The second judgment related to confiscation of the proceeds of crime from the man.
The court calculated that the gross proceeds of the crimes were €1,924,579, from which the court deducted €1,626,269 in what it described as “deductible costs”, leaving a final figure for confiscation of €298,310 which the court considered to be the company’s “profit”. This was the amount the man was ordered to pay by way of confiscation order.
The judgment does not record the Court (or the prosecution) giving consideration to the recent CJEU judgment which upheld a confiscation of the gross proceeds of crime.
It is being reported that a 55-year old man has been arrested in Germany on suspicion of violating the Foreign Trade Act and EU sanctions against Russia.
Six properties were raided and searched in Nuremberg, Frankfurt am Main, Gross-Umstadt and at Frankfurt-Hahn Airport by the Essen Customs and the Frankfurt Public Prosecutor’s Office.
The man, who is a German and Russian national, is alleged to have procured and exported to Russia satellite antennas and sonars for deep-sea use through a company in Germany.
The press release from Essen Customs is here.
Finnish Customs has given an update on trade sanctions enforcement in Finland. The press release confirms that there are more than 800 such investigations being undertaken by Finnish Customs of which around 90 are being investigated as aggravated offences.
Oddly, a press report, published on the same day, reported that Finnish Customs had more than 740 ongoing investigations. The figure of 740 had been reported back in April, as per our earlier post, itself an increase on the figure of 700 investigations reported in February.
The press release from Finnish Customs also gave detail of a particular investigation into a customs warehouse company in eastern Finland suspected of exporting drones, processors, smartphones, computers and echo sounders to Russia.
The goods arrived in Finland as air freight at Helsinki Airport, after which they were attempted to be exported via the company’s intermediate storage in Virolahti by road to Russia.
The value of the sanctioned goods was about €700 000 and are said to have mostly been ordered from online stores in the US with the consignee in Russia as the Russian postal service.
To date seven people have been questioned as part of the investigation.
The US Attorney for the Southern District of New York has issued a press release, providing details of the arrest in Cyprus of Arthur Petrov a Russian-German national in August 2023 for the purposes of extradition to face charges in the US of breaching US sanctions against Russia.
Petrov only arrived in New York in August 2024 suggesting prolonged extradition proceedings in Cyprus.
Petrov operated the Cypriot company Astrafteros Technokosmos LTD, via which he procured US-origin microelectronics for onward sale, ultimately, to the Russian military through the company LLC Electrocom VPK.
Two other co-defendants remain at large.
It is being reported that a number of government ministers in Luxembourg have filed a criminal complaint with the Public Prosecutor’s Office.
The complaint was filed against Spacety Luxembourg SA, the Luxembourg subsidiary of the Chinese company Spacety. The parent company has been sanctioned by the EU for providing support to Russia’s war in Ukraine.
The Luxembourg company has now filed for bankruptcy and the progress of the criminal matter is not known.
It is being reported that German authorities in the city of Karlsruhe have arrested two individuals. The individuals were husband who is a German national and wife of Ukrainian nationality.
It is alleged that they made available internet access to the sanctioned broadcasting channels Rossiya-1 and Russia Today. EU sanctions prohibit for a person “to broadcast or to enable, facilitate or otherwise contribute to broadcast” of these channels.
Raids on the couple’s home gathered evidence and €40,000. The authorities also obtained a freezing order over a bank account containing €120,000.
Back in July we published a post highlighting that Switzerland’s SECO had imposed 5 new fines for sanctions breaches.
Through a Freedom of Information request we have obtained anonymized and redacted copies of these five Final Administrative Criminal Decisions.
These five decisions, and machine-generated translations are provided below, as well as summaries of the enforcement actions. The numbering sequence from when this blog published the previous 10 decisions is continued.
As previously, the value of the fines are all fairly low and these five cases combine for a total of CHF 13,490.
11. Final administrative criminal decision, dated 19 February 2024
Original: 2024-02-19-I.77-Strafbescheid.pdf
Translation: 2024-02-19-I.77-Strafbescheid_Translation.pdf
This case concerned the attempted export of CHF 10,569.90 of electrical switches to Russia. The export was stopped at Zurich Airport Customs in December 2023.
The goods in question had been included on the Swiss sanctions list as of 25 January 2023.
The company claimed it was unaware the goods were sanctioned, and SECO accepted this finding that the export was negligent rather than intentional.
In light of the company’s cooperation, and the company being able to show a track record of refusing sales to Russia which they knew were sanctioned, SECO set the fine at CHF 750, plus CHF 250 in costs.
The goods in question were returned to the seller.
12. Final administrative criminal decision, dated 26 February 2024
Original: 2024-02-26-I.78-Strafbescheid.pdf
Translation: 2024-02-26-I.78-Strafbescheid_Translation.pdf
This case concerned the attempted export of €57,263 worth of pressure transmitters, pressure transducers and pressure gauges to Russia. The export was stopped at Zurich Airport Customs in December 2022.
The goods in question had been added to the Swiss sanctions list during November 2022.
SECO had earlier written to the company, in 2021, to say that the export of the goods could be done without a licence, subject to the changing requirements of Swiss sanctions.
SECO accepted the argument that the export was not intentional, but found it was negligent and that the company should have been more aware of the sanctions in place.
In light of the company’s cooperation, SECO set the fine at CHF 2,900, plus CHF 970 in costs.
The goods in question were returned to the seller.
13. Final administrative criminal decision, dated 26 February 2024
Original: 2024-02-26-I.67-Strafbescheid.pdf
Translation: 2024-02-26-I.67-Strafbescheid_translation.pdf
This case concerns two attempted exports of spare parts for medical and dental devices to Russia. Within wider sales of nearly €27,000 worth of parts, sanctioned goods with a value of approximately €3,600 were included.
On both occasions the goods were stopped by customs.
The company sought to explain the two prohibited exports by saying that the wrong HS code had been entered into its internal system (9026.2000 instead of 8481.1010) and so it had not been caught by its systems. In the other instance the company said it searched for the HS code using the format in the customs tariff (which used a full-stop in the number), while in the relevant Appendix in the Ordinance the HS code used a space instead of a full stop. The company’s searches against its products therefore resulted in false negatives and the shipments were incorrectly authorised.
The company relied heavily on its detailed procedures and training as mitigation, and had appointed an outside consultant to assist further with compliance. In addition, the company sought a retrospective approval for the exports on humanitarian/medical grounds.
SECO denied that request saying “a retroactive authorization cannot be issued to regularize exports”.
While not alleging an intention to breach the sanctions, SECO decided that the company had been negligent and commented that a “more precise check” of the prohibited codes would have prevented the export. It is as good an example of the importance of fuzzy searching as you’ll find.
The company was fined CHF1,000 and costs of CHF590. The seized goods were returned to the company.
14. Final administrative criminal decision, dated 11 March 2024
Original: 2024-03-11-I.79-Strafbescheid.pdf
Translation: 2024-03-11-I.79-Strafbescheid_Translation.pdf
This case concerned two blocked exports of goods valued at €2000 which were stopped by the Zurich Customs office. The goods included foam generators and level sensors.
In the first example the attempted export took place on the same day as the respective goods were announced as being added to the lists of prohibited items. The version of Annex 23 to the Ordinance had been updated on SECO’s website, but not on other versions. Nonetheless, SECO determined that the export fell under the heading of “negligent”.
In the second example, the company argued that the prohibition against certain goods which are “suitable for use in the aerospace industry” could be negatived by evidence that this was not going to be the actual use. SECO disagreed.
The company was fined CHF2,300 and ordered to pay costs of CHF970. The seized goods were returned to the company.
15. Final administrative criminal decision, dated 13 March 2024
Original: 2024-03-13-I.76-Strafbescheid-002.pdf
Translation: 2024-03-13-I.76-Strafbescheid_translation.pdf
This case concerned a shipment of 8,640kg of products with customs code 3824.9919 valued at €19,612.80.
The goods were seized by the St. Gallen customs office in October 2022.
The company claimed that it had no knowledge that the goods in question were subject to Switzerland’s Russian sanctions.
SECO’s response was to state:
“However, it is not the actual knowledge of the persons concerned of the criminal nature of the sale and export transaction that establishes criminal liability, but it is sufficient if the knowledge of the criminal liability should have been present in the company with due diligence. This must be affirmed in the present case.”
SECO accordingly concluded that the company was guilty of a negligent breach of sanctions.
A fine of CHF2,800 was imposed and costs of CHF960. The seized goods were returned to the company.
A press release from the United State’s Attorney’s Office for the Southern District of New York has included details of an arrest and extradition by the Cypriot authorities in support of US charges of sanctions and export control violations.
On 26 August 223, Arthur Petrov was arrested in Cyprus in relation to:
“export control violations, smuggling, wire fraud, and money laundering offenses in connection with his alleged participation in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military”.
Mr Petrov operated the scheme through his Cypriot company Astrafteros Technokosmos LTD.
His extradition from Cyprus was completed and he arrived in the US on 8 August 2024.
