Russia – European Sanctions Enforcement

July 1, 2024 by Mark Handley

Germany – raids and arrests for suspected exports of luxury cars to Russia in breach of sanctions

On Friday the Customs office in Frankfurt raided and searched 24 residential and business premises mostly in Offenbach am Main and Aschaffenburg although Customs said the network extended across Germany. Four individuals were arrested. The actions were part of an investigation into the suspected export of luxury cars to Russia in breach of EU sanctions.

The individuals arrested were aged between 39 and 44 with one woman and three men.

The allegation is that 170 luxury cars had been exported since 2022.

Five cars were seized as part of the raids along with evidence and €300,000 in cash. In addition a freezing order was obtained over €13.3m in bank accounts said to be the profits from the enterprise.

The German authorities have been particularly active in enforcement related to luxury cars of late:

- - 28 June: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/06/28/germany-raids-on-seven-premises-as-part-of-sanctions-investigation-into-car-exports/
  - 7 June: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/06/07/germany-raids-on-luxury-car-exporters-to-russia/
  - 8 May: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/05/08/germany-individual-convicted-for-exporting-luxury-cars-to-russia-in-breach-of-eu-sanctions/
  - 6 March: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/03/06/germany-three-arrested-for-exporting-luxury-cars-in-breach-of-russian-sanctions/

July 1, 2024 by Mark Handley

Poland – sanctions enforcement statistics including 20 fines to date

As part of the press article (behind a paywall) on the recent fines against Novatek Green Energy and Geleo (see our post here), the Polish authorities have also provided an update on their enforcement activity more broadly.

- - Total administrative proceedings commenced: 48
  - Final decisions to date: 33
  - Declination or waiver of fine or finding of no breach: 13
  - Fines imposed to date: 20
  - Ongoing proceedings: 15
  - Total fines to date: 4.8m zloty (c. $1.2m)

Certainly the figure for total fines does not include the fine against Novatek Green Energy (which was 12 million zloty), but it is also a little unclear whether or not the figure includes the fine against Geleo (which was 4m zloty).

The report also notes that most of the 20 penalties have been imposed in 2024, with only two imposed by the end of 2023 for a combined total of 71,000 zloty (c. $17,700).

These enforcement actions appear to relate to a mix of EU and the separate Polish sanctions.

No information has been provided as to the conduct which gave rise to the fines, or who the fines were imposed on.

July 1, 2024July 1, 2024 by Mark Handley

Poland – fines imposed on two companies for circumvention of Russian sanctions

Now updated from the post first published on 28 June.

It is being reported (behind a paywall) that the Malopolska Customs and Tax Office of Krakow has imposed fines of 12 million zloty (c. €2.78m) against Novatek Green Energy and 4 million zloty (c. €927,000) against employee-owned company Geleo.

The fine against Geleo was imposed on 31 May. It was for breach of the relevant asset freeze and for circumvention of Polish sanctions. The transaction in question was the purchase, for €1, of 100% of the shares in Novatek Green Energy from the Swiss company Novatek Gas and Power GmbH, which in turn is a direct subsidiary of the Russian company OAO Novatek.

The fine against Novatek Green Energy was imposed on 25 June, and was imposed for multiple transactions in breach of the imposed asset freeze.

With particular thanks to Dr Marcin Łukowski who provided a copy of the relevant article.

June 28, 2024 by Mark Handley

Italy – investigation into financial transfers to Russia

As part of its Annual Report, the Unità di Informazione Finanziaria per l’Italia within the Bank of Italy has announced investigations into suspicions of illicit money flows from Italy to Russia via third countries.

No further details are available at this time including the amounts at stake, the identities of the third countries, or whether a referral has been made to the criminal authorities.

It is also unclear whether the transfers are alleged to have been made for or on behalf of designated persons.

June 28, 2024 by Mark Handley

Germany – raids on seven premises as part of sanctions investigation into car exports

On Wednesday more than 60 officers from customs offices and prosecutors raided seven premises in Germersheim in the Rheinland-Palatinate region.

The investigation relates to the export of approximately 190 luxury cars to Russia valued at €4.5m, with the exports conducted via Kazakhstan, Kyrgyzstan, Belarus and Turkey.

As well as evidence significant amounts of cash were seized and attachment orders have been obtained over bank accounts and real estate.

June 25, 2024 by Mark Handley

Norway – investigation into ship-to-ship transfers of fish

It is being reported that the Norwegian Coast Guard conducted an investigation in May into possibly unlawful ship-to-ship transfers of fish between a Russian and a Norwegian vessel.

The transfers involve fish caught by the Russian vessel which cannot then land the fish in the EU, and so engages in a ship-to-ship transfer of the fish to a Norwegian vessel which then landed the fish in the Netherlands.

As there are no import prohibitions in the EU in relation to Russian fish, and the relevant prohibition is the entry into an EU port of a Russian vessel, the report notes that the Norwegian authorities concluded that no breach had occurred.

June 7, 2024 by Mark Handley

Germany – raids on luxury car exporters to Russia

It is being reported (in German and English) that the Customs Investigation Office in Essen and the Public Prosecutor’s Office in Bochum conducted raids on two premises including on a luxury car dealership on suspicion of exporting more than €5 million in cars to Russia.

The allegations include that fictitious destinations for the exports were put forward when the real destination was Russia.

Evidence and cars were seized as part of the raids.

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”.

June 3, 2024 by Mark Handley

Sweden – companies called to Foreign Ministry to explain possible circumvention

It is being reported (e.g. here and here) that a number of large Swedish companies have been called to the Foreign Ministry to attend a meeting also attended by a number of other authorities.

The meeting concerned information received by Sweden from the European Commission about exports to Russia which may have been in breach of, or circumvented, the EU’s sanctions.

The companies called to attend the meeting included Atlas Copco, Ericsson, Volvo, SKF and Sandvik.

The companies deny breaches of sanctions.

The Swedish authorities are now considering what further action to take.