Tag: Custodial sentence

Posted on by Mark Handley

Netherlands – third defendant found guilty in sanctioned aircraft parts export prosecution

Further to our earlier posts from 8 October and 7 October relating to the conviction of a company and individual for exporting aircraft parts to Russia in breach of EU sanctions, the Rotterdam District Court ruled on 22 November that the third co-defendant is also guilty.

The judgment is here.

The individual was an employee of the Ministry of Defence and was first arrested in September 2023 (see our earlier post).

The conviction was based on the export of parts via Tajikistan, Kyrgyzstan, Turkey the UAE and Serbia. The Defendant was also convicted of falsifying documents and of a minor fire arms charge.

The court accepted findings of PTSD by court psychologists and the probation service.

At sentencing the court stated: “In view of the seriousness of the proven facts, from the point of view of general prevention, a prison sentence of considerable duration is in principle appropriate“.

In the circumstances of the defendant, however, the custodial sentence was limited to the period of pre-trial detention with a further period of 195 days suspended for two years. In addition 240 hours of community service was imposed.

The individual was also disqualified from acting as a company director for three years.

Posted on by Mark Handley

Latvia – 2-year jail sentence for breaching designated person’s asset freeze

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.

Posted on by Mark Handley

European sanctions enforcement: the custodial sentences

Although one of the filters on this blog is “custodial sentence”, I thought it might be helpful to collect all the examples in one place.

As such, here is the full list of custodial sentences that have been imposed across Europe for sanctions offences since 2017. Please note this excludes suspended sentences.

2017:

2018:

2019:

2020:

2021:

2022:

2023:

2024:

Overall the figures are dominated by the Netherlands and Germany with approximately 68 of the 80 years of sentences between them. Indeed, as the graph below demonstrates, other than Finland’s 40-day sentence for breaching a travel ban, the Netherlands and Germany are the only European countries to have sent someone to prison for sanctions offences since 2019.

Posted on by Mark Handley

Netherlands – conviction and confiscation for exporting sanctioned goods to Russian companies

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:

  • firstly that “the court looked at penalties imposed in comparable cases, although there is not much comparative material”; and
  • the court’s aim in sentencing was to “give the suspect a good rap on the knuckles”, but not to hinder the man’s ability to continue operating his business.

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.

Posted on by Mark Handley

Germany – seven year sentence for exports of military and dual-use goods to Russia and confiscation of profits

It is being reported that the Higher Regional Court in Stuttgart has convicted Ulli S, a 56 year old man, of breaches of the EU sanctions against Russia and the German foreign trade law.

As per our earlier posts, the man was arrested in August 2023, and had been charged in November 2023.

The exports were of machinery which can be used for the manufacture of sniper rifles and other weapons. Some of the exports were sent to Russia via Switzerland and others via Lithuania, while the customs data was falsified.

The contracts for the supply of the goods had been entered into in 2015.

The individual is said to have profited by 2.1 million euros, while a Swiss holding company benefitted by roughly 3 million euros. According to Der Spiegel these sums have been confiscated.

The trial lasted several months and is subject to a possible appeal.

Posted on by Mark Handley

European Sanctions Enforcement – performance league tables (2017-2024)

The figures are, naturally, based on publicly-available information as collated in this blog.

The figures are not always easy to reconcile into a coherent picture. For example:

  • The Netherlands has the most convictions, but none of the longest sentences;
  • Germany has far fewer convictions than the Netherlands, but all of the longest sentences;
  • Finland has a massive number of ongoing investigations but has only imposed fines to date of €11,080;
  • Switzerland has 15 convictions, but no custodial sentences and €58,435 in fines;
  • Poland has the highest number of successfully-concluded enforcement actions under the Russian sanctions but has no criminal convictions; and
  • The UK dominates the figures on total fines, but has a low number of criminal convictions.

Most criminal convictions since 2017:

  1. Netherlands – 40
  2. Switzerland – 15
  3. Germany – 10
  4. Latvia – 7

Fewest criminal convictions since 2017:

  1. Austria, Bulgaria, Croatia, Cyprus, Estonia, France, Greece, Hungary, Ireland, Lithuania, Luxembourg, Malta, Moldova, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden – 0
  2. Czechia and Norway – 1
  3. Denmark, Italy and United Kingdom – 3

Most Russian/Belarusian sanctions convictions/fines/penalties since 2017:

  1. Poland – 24
  2. Netherlands – 21
  3. Switzerland – 15
  4. Latvia – 11

Fewest Russian/Belarusian sanctions convictions/fines/penalties since 2017:*

  1. Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Greece, Hungary, Ireland, Luxembourg, Malta, Moldova, Portugal, Slovakia, Slovenia, Spain, Sweden – 0
  2. Czechia, Italy, Norway, Romania – 1
  3. Finland – 4
  4. United Kingdom and Lithuania – 7

* The Estonia figure is uncertain based on this story, but how high/low is uncertain.

Most currently-ongoing investigations:*

  1. Finland – 800
  2. Latvia – 310
  3. United Kingdom – 307
  4. Netherlands – 192

* Germany probably belongs on this list. It has commenced at least 1988 investigations since February 2022, but many of the States that responded to Freedom of Information Requests did not provide data on ongoing investigations, but only the total number of investigations commenced since the start of the full-scale war.

Longest custodial sentences since 2017 (where the sanctions element can be distinguished):*

  1. Germany – 7 years (2020)
  2. Germany – 6 years and 9 months (2024)
  3. Germany – 5 years (2023)
  4. Germany – 3 years and 9 months (2021)

* The list excludes convictions where there are also non-sanctions offences and where the sentence cannot be divided, such as the 19-year sentence imposed in the Netherlands which included war crimes offences.

Most extraditions to the United States to face US sanctions charges

  1. Latvia – 4
  2. Cyprus, Estonia, Spain, United Kingdom – 2
  3. Croatia, Germany, Greece, Italy, Romania – 1
  4. All other European countries are at zero.

Highest total value of fines/confiscations/penalties (in Euros) since 2017:

  1. United Kingdom – €268,344,548 (of which the FCA’s fines make up €228,465,751)
  2. France – €50,600,000
  3. Germany – €26,112,903
  4. Lithuania – €23,513,079

Lowest total value of fines/confiscations/penalties (in Euros) since 2017 where value is known:*

  1. Bulgaria, Croatia, Cyprus, Greece, Hungary, Ireland, Moldova, Portugal, Slovakia, Slovenia, Spain and Sweden – €0
  2. Norway – €4260**
  3. Finland – €11,080
  4. Switzerland – €58,435
  5. Czechia – €143,500

* Malta has imposed a fine of unknown size but greater than €800, and Austria has imposed at least 10 fines of unknown value.

** This is an underestimate for Norway as it has concluded 23 confiscations of goods where no value was published.

Highest single fines/confiscations/penalties within 2024

  1. UK – £29m by the FCA
  2. Lithuania – €13.6m by Customs
  3. Lithuania – €8.23m by the Financial Crimes Investigation Service
  4. Poland – €2.78m by Customs

Most successfully-concluded enforcements within 2024

  1. Poland – 22
  2. Netherlands – 10
  3. Lithuania – 7
  4. Switzerland – 6
  5. UK – 5*
  6. Germany – 4
  7. Luxembourg – 3
  8. Estonia – 2**
  9. Finland – 2
  10. Latvia – 2
  11. Czechia – 1
  12. Malta – 1
  13. All other European countries are at zero.

* The UK figure excludes export control enforcements unrelated to sanctions.

** The Estonia figure is likely to be higher based on this story, but how much higher is uncertain.

Posted on by Mark Handley

Netherlands – two years and eight months sentence for exporting sanctioned goods to Russian airlines

On 3 October 2024, the District Court in Rotterdam sentenced an individual to 32 months in jail, as well as confiscation of $8,000 and €250,000 in cash, as well as the forfeiture of all the stock-in-trade and business bank accounts.

The individuals had exported over 460 prohibited aircraft parts to three different Russian airlines: i) Ural Airlines; ii) S7 Engineering LLC; and iii) JSC Siberia Airlines.

The defendant had created a paper trail to mask the destination of the exports which purported to show exports to Serbia, Turkey and Tajikistan. Internal documents, however, linked the exports to the Russian customers.

Messages on seized phones included: “We’re going to keep loading until we’re arrested”.

Posted on by Mark Handley

Netherlands – conviction for breach of ISIS sanctions upheld by Court of Appeal

Yesterday the Court of Appeal in the Hague issued judgment on an appeal against a conviction for multiple terrorism-related offences including one of making funds or economic resources available to a person designated under the EU’s ISIS sanctions.

The transfers were of €200 and €300 respectively.

The conviction was upheld on the basis that the necessary criminal intent was present:

“In order to prove that the regulations have been deliberately violated, it is not necessary to prove that there was intent to violate the standards set out in the indictment. The intent is colorless.  However, it must be proved that the defendant intended that the sums of money would end up directly or indirectly with [person 1] and [person 2], to whom the Terrorism Sanctions Regulations 2007-II applied at the time“.

The total sentence was for a custodial prison term of 48 months, but it is not possible to identify what proportion of that was for the sanctions offence and what proportion for the other non-sanctions convictions.

 

Posted on by Mark Handley

Germany – CJEU rules on appeal against conviction and interpretation of Myanmar sanctions

Further to our earlier post, in 2022 a German individual was convicted of importing timber from Myanmar in breach of EU sanctions and was sentenced to 19 months in jail and a substantial confiscation order of over €3m was also issued.

The case then went on appeal through the German system, and ultimately a referral was made to the Court of Justice of the European Union (“CJEU”).

The argument on the appeals, and for consideration by the CJEU, was that the timber in question underwent sufficient processing in Taiwan, such that it should no longer be considered timber of Myanmarese origin.

The CJEU has ruled that the timber which only underwent “debranching and debarking” was not processed to a level as to amount to a change of origin. The CJEU also held that the timber which was sawn into “wooden cuboids” also did not undergo sufficient processing as to amount to a change of origin.

By contrast the timber which was sawn into finished boards of lumber was held to have undergone sufficient processing to properly be considered of Taiwan origin.

On the referred question of whether the prohibition against goods “exported from Burma/Myanmar” in article 2(2)(a)(ii) of the EU Regulation prohibits imports via third countries, the CJEU held the prohibition “must be interpreted as meaning that that provision covers only goods that have been imported into the European Union directly from Burma/Myanmar“.

It should be noted that this last ruling was in the context of a separate prohibition against the importation of goods which “originate in Burma/Myanmar”, with the court ruling that this other provision was the one which caught imports via third countries.

The German courts will now need to apply these findings to the existing conviction.

 

Posted on 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.

 

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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