Netherlands – European Sanctions Enforcement

July 15, 2024July 15, 2024 by Mark Handley

Netherlands – corporate fine and confiscation for company’s role in building Kerch bridge

The Dutch Public Prosecution Service has issued a press release relating to a settlement with the company Dieseko Group BV for its role in supplying equipment and expertise for the construction of the Kerch bridge in breach of the EU’s sanctions in relation to Crimea.

The prohibited activities took place during 2015 to 2016 and were uncovered through press reporting in 2017. An investigation was commenced in 2017 (see our earlier post) and then expanded to include Dieseko (see our earlier post).

The company exported equipment and machinery (via Finland but with the knowledge that the goods were to go to Crimea) and supplied staff to the site to provide technical assistance.

The company was given the maximum available fine per each of the three counts with a discount for its cooperation with the investigation for a fine of €180,000. The cooperation includes document production and making staff available for interview.

The company has also had its entire “gain” from its work on the bridge confiscated of €1.6m. It is not entirely clear if this is gross or net profits.

The company has put in place remediation and compliance measures. The senior management of the company were interviewed as part of the investigation but will not be prosecuted as two have since passed away and one is seriously ill.

For the Statement of Facts see here.

For the Settlement Agreement see here (in Dutch).

The Dutch version of the Press Release includes comment that the Dutch intend to prosecute another company and several individuals for their involvement in the building of the Kerch bridge.

July 11, 2024 by Mark Handley

Netherlands – conviction for making funds available to designated person under Dutch sanctions

The District Court of Rotterdam has convicted an individual on one count of making funds (€350) available to a person designated under the Dutch Terrorism Sanctions Regulations 2007.

The defendant was acquitted of another charge of making funds available to ISIS on the basis of a lack of evidence that the defendant knew the recipient was connected with ISIS and because the transfer had taken place after ISIS had been largely defeated in Syria.

The individual was sentenced to 60 hours of community service, although this time had already been performed by virtue of a lengthy pre-trial detention.

June 17, 2024June 17, 2024 by Mark Handley

Netherlands – Attorney-General’s advice to uphold conviction and custodial sentence for ISIS sanctions violation

The post below has been updated on 17 June 2024 after the helpful input from the Sanctions Unit of the Dutch Ministry of Foreign Affairs:

Further to our earlier post, in late 2021 the Dutch Court of Appeal sentenced an individual to a six month custodial prison term for a number of offences including for making a payment in breach of the EU’s ISIS sanctions.

In his advice to the Dutch Supreme Court has upheld the Attorney General has advised that the convictions for terrorist financing and breaching the Dutch Sanctiewet 1977 be upheld, but that the conviction for money laundering be remanded to the Court of Appeal.

The facts relate to the transfer of €471 from an individual to his brother who was in Syria as part of ISIS. The defence sought to argue that the man did not have the required intent to support terrorism, or knowledge that the funds had benefitted ISIS.

As stated by the Attorney General at [2.9]:

“With regard to the violation of the provision of Article 2 of the Sanctions Act 1977, the offense proven under 2, the suspect’s intent does not have to be aimed at non-compliance with the legal regulations referred to in the finding of proof. The suspect’s intention must be aimed at ensuring that the money ends up indirectly with (a) terrorist organization”.

June 5, 2024 by Mark Handley

Netherlands – raids and arrests for suspected Russian timber imports

The Dutch FIOD has today issued a press release announcing raids on two businesses and two homes and the arrest of two individuals aged 73 and 46.

The arrests were on suspicion of importing Russian timber in breach of the EU’s sanctions and for circumventing the prohibition on Russian timber imports by purchasing timber through Chinese suppliers.

The businesses and individuals have not been named but the press release localises them in Ridderkerk.

The press release also confirms that the timber has been seized.

June 4, 2024 by Mark Handley

Netherlands – an end to exemptions allowing port entry for Russian-flagged vessels

The Dutch Minister for Infrastructure and Water Management has announced in a written statement to parliament, that the Dutch government will no longer grant exemptions to the EU’s prohibition on Russian-flagged vessels, or vessels registered with the Russian Maritime Register of Shipping from using Dutch ports.

The Dutch had been granting permission for Russian fishing vessels to use Dutch ports based on the “food products” exemption. This practice will now stop with the Minister stating: “Future requests for an exemption for Russian flagged ships will also be assessed negatively”.

Press reports in the Netherland had linked Russian fishing vessels to espionage, but the main reasons given in the statement include:

- - “increasing geopolitical tensions”;
  - “upcoming tightening of European sanctions policy”; and
  - that the issue “had also been discussed in the debates about the European summit by a number of factions and attention was drawn to effective implementation of the sanctions by the Netherlands”.

May 21, 2024 by Mark Handley

Netherlands – court permits sanctions defendant to resume trading pending trial

Further to our earlier post from July 2023 concerning raids and an arrest in the Netherlands of a 41-year old on suspicion of breaching Russian sanctions, the District Court of Rotterdam has released a judgment concerning a pre-trial application by the accused seeking the release from attachment of the stock in trade of his business.

The criminal trial is stated as “not expected to take place until the autumn at the earliest”.

The court granted the application, ruling that “the complainant has (for some time now) no other source of income, while his fixed costs continue” and that “the interest of the complainant in being able to trade in the company stock … and thus obtain some income, outweighs” the government’s interest in maintaining the attachment.

May 13, 2024 by Mark Handley

Netherlands – investigation as to whether a designated person owns/controls football club

It is being reported in the UK and in the Netherlands, that the Dutch Ministry of Economic Affairs is investigating whether Roman Abramovich owns or controls the football club Vitesse Arnhem. The allegation of ownership or control is based on a series of financial arrangements and loans.

While those arrangement pre-date the sanctions, if the club was indeed owned or controlled by a designated person its operations since the designation are likely to have been conducted in breach of the asset freeze.

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 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.