Military Goods – European Sanctions Enforcement

November 8, 2024November 8, 2024 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.

November 4, 2024November 4, 2024 by Mark Handley

United Kingdom – HMRC compound penalties for Russian sanctions and export control violations totaling £1.9m

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:

“August 2024 – £402,417.75 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
August 2024 – £37,743.34 was paid relating to the unlicensed exports of dual-use goods controlled by Retained Regulation 428/2009
September 2024 – £1,480,785.44 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008″

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.

October 15, 2024October 15, 2024 by Mark Handley

Cyprus – extradition of individual to face US sanctions charges

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.

July 23, 2024August 1, 2024 by Mark Handley

UK – extradition to the US for person suspected of Iran sanctions breaches

A press release from the US Department of Justice records that an individual, Saeid Haji Agha Mousaei, was arrested in the UK on 24 January 2023 pursuant to an Interpol diffusion notice.

Mr Mousaei was then subsequently extradited to the US where he faces multiple charges arising from the alleged supply of “controlled electronics with military applications, including signals equipment like oscilloscopes and spectrum analyzers, for export and re-export to Iran”.

It is alleged that false documentation was prepared which indicated that the goods were to remain in countries such as the UAE and Armenia, but the goods were all transshipped to Iran via the UAE.

July 18, 2024July 22, 2024 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.

June 25, 2024 by Mark Handley

Italy – seizure of Russian-origin military cargo bound for Libya

It is being reported that the Italian authorities, upon receipt of information from the US authorities, have conducted an operation in the Mediterranean to seize millions of dollars in unspecified military equipment on board the MSC Arina.

The goods are suspected of being exported to Libya in breach of the arms embargo that forms part of the UN sanctions.

The vessel had departed Shenzen, China in April and was allowed to continue after the cargo in question was removed.

It is being reported that the equipment was destined for General Khalifa’s forces in eastern Libya.

June 4, 2024 by Mark Handley

Spain – enforcement of arms embargo on Israel

The Spanish authorities, on May 16, refused permission for a vessel carrying an arms shipment from India to Israel to call at the port of Cartagena.

The vessel, the Marianne Danica, is operated by the company H. Folmer & Co, and was carrying 27 tons of explosives from Chennai (formerly Madras).

May 6, 2024 by Mark Handley

Germany – trial starts of three individuals accused of drone exports to Russia

Further to our earlier post about the laying of charges against three individuals accused of exporting drones and drone parts to Russia in breach of the EU’s sanctions, the criminal trial of these individuals started on Friday.

The three are, between them, accused of 54 counts of breaching sanctions.

The conduct is alleged to have included exports to front companies in Kazakhstan, Kyrgyzstan, Hong Kong, Turkey and the United Arab Emirates, and of deceiving component suppliers based in the US by saying that Germany was to be the final destination of the products.

April 25, 2024May 16, 2024 by Mark Handley

United Kingdom – HMRC issues £2.3m in compound penalties for sanctions and export controls breaches

His Majesty’s Revenue and Customs, the body empowered to enforce export controls and trade sanctions in the UK, has today published two Notices to Exporters setting out compound penalties in relation to Russian sanctions and export control violations.

The first Notice, in relation to an unnamed company, relates to a penalty of £1,058,781.79 imposed for breaches of the UK’s Russian sanctions regulation.

No information is given as to the nature of the conduct, the value of the goods, or why a criminal prosecution was not brought. There is no mention of a confiscation of the proceeds of crime.

The second Notice relates to export control violations that are not described as breaches of the UK’s sanction. Again no information is given as to the names of the companies, the nature of the violations, or an indication given as to the confiscation of the proceeds of crime.

To quote the Notice:

“The 6 settlements made by UK companies were:

- January 2024 – £12,700.00 was paid for a breach of licence conditions in relation to the export of military goods
- February 2024 – £33,822.64 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £971,726.00 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £139,841.85 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008 and dual use goods controlled by Retained Regulation 428/2009
- March 2024 – £92,817.40 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- March 2024 – £56,915.27 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008“.

April 22, 2024April 22, 2024 by Mark Handley

Germany – charges laid in relation to exports to China

The German Federal Prosecutor’s office issued a press release earlier today in relation to the charging of three individuals for alleged export control violations.

The three charged are German nationals named as Herwig F., Ina F. and Thomas R.

It is alleged that the three were working for or on behalf of a Chinese intelligence agency and that they worked to procure information in relation to technology with military application, including ship engines.

The defendants are also charged with the unlicensed export of a laser to china in breach of the EU’s Dual-Use Regulation.