Trade Sanctions – Page 19 – 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 15, 2024 by Mark Handley

Czechia – conviction, fine and confiscation for export of luxury cars to Russia

It is being reported (and here) that the Czech authorities have obtained a conviction of Vladimir Lihutin, a Czech national, for an attempt to export three luxury cars to Russia.

The sentence includes:

- a fine of 300,000 crowns (c. €11,500)
- confiscation of €132,000 (being the sums paid by the customers for the cars)
- a ban on buying and selling any cars for 20 months.

This is the first known conviction or fine imposed in Czechia for breaches of EU sanctions.

July 11, 2024July 12, 2024 by Mark Handley

France – Russian vessel barred from entering the port of Brest

It is being reported that the French port of Brest has barred the Russian vessel Shtandart from entering thereby enforcing the EU’s prohibition on Russian vessel entering EU ports.

The vessel has been re-flagged to the Cook Islands but remains operated by Russians. It is a modern replica of a frigate of Tsar Peter the Great which was sailing to Brest to take part in the Maritime Festival.

The same report notes that the vessel had previously been in another French port at La Rochelle.

July 9, 2024 by Mark Handley

UK – HMRC criminal investigation into alleged exports of perfume to Russia

In a civil judgment handed down earlier this week, it was revealed (at paragraph 63) that an individual, David Crisp, was arrested by HMRC on 10 October 2023 and electronic devices were seized.

The allegation is that companies managed by Mr Crisp were knowingly exporting perfume to Russia in breach of the UK’s sanctions.

As of the date of the judgment, HMRC had confirmed (at paragraph 69) that the criminal investigation remains ongoing but so far no charges have been made and Mr Crisp is no longer on bail.

The judgment itself is of note for the Court removing Mr Crisp as a director of the relevant companies on the basis that there was a “strong prima facie evidential basis for the allegations” of breaching the UK’s sanctions. The orders were a form of interlocutory relief as part of an unfair prejudice petition brought by another of the shareholders of the companies.

July 5, 2024 by Mark Handley

Latvia – corporate fine for import of possible Russian timber

The Latvian State Forest Service (VMD) has fined a company €10,000 in relation to timber which may have been sourced from Russia.

The fine was imposed on the basis of the EU’s Timber Regulation and the failure of the company to properly conduct due diligence on timber that may have been Russian in origin which would render the timber as illegally sourced.

It is being reported that the VMD has taken the view that the importer needs to be able to positively exclude the possibility that the timber is of Russian, or Belarusian, origin.

July 4, 2024 by Mark Handley

Germany – fine for the captain of distressed vessel which took Russian timber into German port

Further to our earlier posts about the detention and subsequent release of the vessel the Atlantic Navigator II which carried, amongst other cargo, birch timber of Russian origin into the German port of Rostock.

It is now being reported that the Captain of the vessel has received a fine which he was directed by the Public Prosecutor’s Office to pay to the charity Human Rights Watch.

The fine was €8,000, which no doubt reflects the fact that the vessel only entered German waters after experiencing technical difficulties.

July 1, 2024July 10, 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:

July 1, 2024July 12, 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.