The response identifies the following enforcement statistics:
23 companies fined for sanctions breaches to date (between 2020 and 2024);
560,000 lei in fines (c. €112,000);
41,492,169 lei confiscated as the proceeds of crime (c. €8,330,000);
11 of the fined companies have appealed the fines imposed:
4 of those appeals were won by ANAF;
the ANAF lost one;
6 of the appeals are pending, although ANAF won 4 of those at first instance;
As part of this enforcement ANAF also undertook 7 audits of companies which were doing business with sanctioned entities and imposed fines of 65,575 lei (c. €13,100).
As per our earlier post, as of November 2022, Romania was reported to have imposed fines of 280,000 lei and confiscated 13,171,000 lei (c. €2,650,000). The balance of these further fines have been imposed since that date.
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.
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.
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.
Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Greece, Hungary, Ireland, Luxembourg, Malta, Moldova, Portugal, Slovakia, Slovenia, Spain, Sweden – 0
Czechia, Italy, Norway, Romania – 1
Finland – 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:*
Finland – 800
Latvia – 310
United Kingdom – 307
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 sentencessince 2017 (where the sanctions element can be distinguished):*
* 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 Statesto face US sanctions charges
Latvia – 4
Cyprus, Estonia, Spain, United Kingdom – 2
Croatia, Germany, Greece, Italy, Romania – 1
All other European countries are at zero.
Highest total value of fines/confiscations/penalties (in Euros) since 2017:
United Kingdom – €268,344,548 (of which the FCA’s fines make up €228,465,751)
France – €50,600,000
Germany – €26,112,903
Lithuania – €23,513,079
Lowest total value of fines/confiscations/penalties(in Euros) since 2017 where value is known:*
Bulgaria, Croatia, Cyprus, Greece, Hungary, Ireland, Moldova, Portugal, Slovakia, Slovenia, Spain and Sweden – €0
The Rotterdam District Court has largely upheld a fine of €95,000 imposed on a trust services provider by the Dutch National Bank.
The DNB’s investigation started in 2019, and the fine was originally imposed on 2022.
The fine related to compliance failings including both money laundering and sanctions failures. The firm’s policies and procedures were insufficient and there was a lack of proper identification of the UBO and of ongoing diligence.
On appeal the fine was reduced to €90,250 due to an argument that the investigation process had been unduly lengthy,
Further to our post of yesterday about an individual sentenced to 32 months for exporting aircraft parts to Russia in breach of EU sanctions, the Rotterdam District court has released a second judgment for the conviction of the company involved.
The company has been sentenced to pay a fine of €165,826. The prosecutor was seeking a fine of all the funds in the company’s bank accounts at the time it was raided, but it is unclear from the judgment whether the fine is that sum.
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”.
The UK’s Financial Conduct Authority has today fined Starling Bank £28,959,426 for sanctions compliance failings.
The Final Notice states that the bank became aware in January 2023 that its screening was being done against a small sub-set of the Consolidated List of sanctions targets.
The FCA described the compliance program at Starling as “shockingly lax”.
The FCA also noted that the fine would have been £40,959,426 without Starling’s agreement to resolve the matter.
With the news of OFSI imposing a civil penalty, Europe has today hit its 300th successfully-concluded enforcement action in relation to trade and financial sanctions and export controls since the start of 2017.
To mark the occasion we are publishing updated enforcement graphs which we last posted back in January when this blog first went live.
Total number of fines/penalties/convictions: 2017-2024
As the graph shows 2024 has, to date, been the most prolific in terms of sanctions enforcement in recent years with 69 so far this year. Already there have been three times as many successfully-concluded enforcement actions in Europe in 2024 as there were in 2017.
Total value of fines/penalties: 2017-2024
While the volume of enforcement has increased, the shape of this graph illustrates that the value of the fines imposed did not keep pace in the years following when the UK and French financial services regulators having imposed fines of £102m, €50m, and £38m.
After several years of plateau 2024 is, however, showing signs of acceleration with fines of over €32m imposed so far this year – more than double the figure for 2023.
Russian / Belarusian sanctions enforcement
Focusing just on enforcement of the sanctions against Russia and Belarus, perhaps unsurprisingly, the picture varies across Europe, although the total of 111 examples to date is worth stressing in and of itself.
This graph includes only enforcement actions that have concluded with a fine, penalty, conviction or confiscation. A total of 18 countries show no examples, although it is possible that there are such examples and they have not been made public. Poland, the Netherlands, Switzerland and Latvia are the only countries with more than 10 examples.
This is another way of looking at the same data. Again, this is specific to the Russia/Belarus sanctions, and is the number of concluded enforcements. This does not reflect the scale of the fines. A few countries dominate the picture.
Current investigations
Looking at publicly-available data on the number of current/live investigations reveals a similar picture. Many states appear to be currently inactive, while there are more than 2000 investigations which are reported as ongoing across Europe. That is a figure which bears repeating – more than 2000 ongoing regulatory/criminal sanctions investigations across Europe.
It should be remembered, however, that for most states such information has not been made public. In Germany alone nearly 2000 investigations have been started since early 2022, but the information is limited on how many of these remain active.
The UK’s Office of Financial Sanctions Implementation has today issued notice of a civil monetary penalty it has imposed on a company called Integral Concierge Services Limited (“ICSL”).
The penalty was for £15,000.
The fine related to 26 payments made to, or received from, a designated person under the UK’s Russian sanctions. The payments related to property management including collecting rent, paying for maintenance, and ICSL taking its own management fees. The designated person was not named.
The company did not initially self-disclose, but did then cooperate including by disclosing breaches that had not yet been identified by OFSI.
The company also breaches the reporting requirements under several general licences, but OFSO chose to not fine in relation to those breaches but rather to treat those failures as aggravating factors.