It is being reported (here and here) that the German authorities have conducted raids on business and residential premises in the town of Königswinter in relation to a criminal investigation into the alleged exports of luxury cars to Russia shipped through third countries.
The raids are said to have taken place in late September and a criminal case has been opened. Cars, cash and evidence were all seized as part of the raids.
The sales are alleged to have totalled more than €4 million.
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.
The company is not named in the judgment.
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 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.
Details of confiscations conducted by Estonia’s Customs office have been reported including the confiscation of goods being exported to Russia at border crossings in breach of EU sanctions. The confiscations include €3,275,295 in cash, electronics parts and equipment, a Starlink antenna, drones, night vision goggles, firearms and ammunition, as well as consumer goods such as jewelry, wine, and diving equipment.
It is also being reported that some of the confiscations are now the subject of ongoing investigations.
It is being reported, based on Freedom of Information requests made to Norway’s custom office by the Barents Observer, that 23 confiscations of luxury and other goods being exported to Russia have taken place since 2023.
One of the confiscations was at an unspecified port, and the other 22 were at the land crossing at Storskog, with 10 during 2023 and 12 so far in 2024.
The reporting makes no mention of other enforcement actions taken after the confiscation.
It is being reported that German authorities in the city of Karlsruhe have arrested two individuals. The individuals were husband who is a German national and wife of Ukrainian nationality.
It is alleged that they made available internet access to the sanctioned broadcasting channels Rossiya-1 and Russia Today. EU sanctions prohibit for a person “to broadcast or to enable, facilitate or otherwise contribute to broadcast” of these channels.
Raids on the couple’s home gathered evidence and €40,000. The authorities also obtained a freezing order over a bank account containing €120,000.
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.
Germany’s Federal Criminal Police have seized the infrastructure of 47 Russian-language no-KYC cryptocurrency exchanges.
The website announcing the action (called “Operation Final Exchange”) states: “We have found their servers and seized them – development servers, production servers, backup servers. We have their data – and therefore we have your data. Transactions, registration data, IP addresses
Our search for traces begins. See you soon“.
It is being reported that the seizures, while certainly targeting a range of financial crimes, were also driven by the use of these exchanges as a means of circumventing sanctions, particularly by designated Russian banks.
It is likely that this Operation Final Exchange will generate substantive financial intelligence and further enforcement actions.
