European Sanctions Enforcement

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.

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.