It is being reported that Polish authorities have arrested and charged a German national with exporting dual-use technology to Russia in breach of EU sanctions.
The arrest was in the Lubusz province and relates to the export of machinery which can be used in weapons manufacture. It is also said that the exports were directed at “Russian military plants involved in weapons production”.
The individual is reported to have admitted his guilt.
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 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.
The UK’s HMRC has issued several “Notices to Exporters” with updates as to recent enforcement activity.
In one Notice, HMRC states that is has agreed three compound penalties with different entities:
As ever with such penalties the nature of the offending is not given, the identity of the offender is not given, and no indication is given as to whether or not the fine includes a confiscation element for the proceeds of the crimes.
In a second Notice, HMRC describes the compound penalty:
“August 2024 – £58,426.45 was paid relating to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019”.
Again, no other details or information is provided, although HMRC notes that this is its 6th compound penalty in relation to Russian sanctions totaling £1,363,129.
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.
Further to our earlier post from May when three Russian national university students were arrested in Finland, an update on the case has now been reported.
The investigation of all three individuals continues, with two having been released from custody over the summer and the third recently released.
The conditions of bail include a travel ban, and it is said that the three are being investigated in relation to the “gross regulatory crime” of exporting dual use goods from Finland to Russia in breach of EU sanctions.
It is unclear whether this case is related to Tampere University recently reporting itself to the Finnish police.
It is being reported that the University of Tampere in Finland has asked the police to investigate a suspected breach of sanctions “at the institution”.
The suspicions relates to potential breach of sanctions as well as export controls on dual-use goods. The particular sanctions regime involved is not specified in the material that is public.
Little other information is available including whether the suspicions relate to staff or students.
The Dutch Prosecution Service has issued a press release stating that they are seeking a sentence for a 42-year old individual consisting of:
i) a 24 month custodial sentence of which 10 months is suspended;
ii) confiscation of all the proceeds of crime obtained from the breaches of sanctions; and
iii) forfeiture of the company’s stock.
As per our earlier posts the man was arrested in July 2023, for exports of electronic components and other dual use goods to Russia via Kyrgyzstan, Uzbekistan and Kazakhstan. The man is also alleged to have falsified records to mask the true destination of the exports.
In May this year the man had won a court hearing allowing his company to keep trading pending trial.
The UK’s primary export controls enforcement body, HMRC, has today issued a Notice to Exporters giving some details on two compound settlements reached with two UK companies.
The first was reached in April 2024 and the unnamed company agreed to pay £258,000 in relation to the “unlicensed transfer of dual-use goods controlled by Retained Regulation 428/2009”.
The second was reached in June 2024 and the unnamed company agreed to pay £90,853.20 in relation to the “the unlicensed exports of military goods controlled by The Export Control Order 2008”.
No other information has been made available.
It is being reported by Reuters that the Polish state-owned company WSK Poznan is being investigated by the National Prosecutor’s Office and the Internal Security Agency on suspicion of supplying parts to Iranian manufacturer, Motorsazan Company, which were then incorporated into drones used by Russian combat forces in Ukraine.
The National Prosecutor’s Office is also reported to have charged the CEO of the company in relation to the export of dual-use goods.
Another report states that the investigation has been ongoing for two years, and notes that the Polish National Prosecutor has denied evidence that parts were used for drones and stated that the investigation relates more to the sale of fuel pumps to Iran.
