Trade Sanctions – Page 4 – European Sanctions Enforcement

September 11, 2024 by Mark Handley

Romania – CJEU upholds confiscation of entire revenue of a transaction in breach of sanctions

Further to our earlier post, regarding an Advocate-General’s opinion on a case arising from a fine and confiscation order imposed by Romania’s ANAF enforcement agency, the CJEU has now issued its judgment.

The case concerned a challenge to the confiscation order of €2,984,961.40 being 100% of the gross revenue obtained by the company Neves 77 Solutions SRL in breach of sanctions.

Neves argued that confiscation of the gross revenue was disproportionate, particularly in light of the right to property enshrined in the European Convention of Human Rights. The CJEU disagrees at [93]:

“the confiscation of all the proceeds of the prohibited brokering transaction thus appears necessary in order to dissuade effectively and efficiently economic operators from infringing the prohibition“.

This provides important clarification on whether confiscation orders should target the gross revenue or just the net revenue obtained from the breaches of sanctions.

The CJEU also dealt with the question of whether the prohibition on “brokering services” contained in Regulation 833/2014 requires the goods in question to, at some stage, have entered the territory of the EU. The CJEU has ruled that there is no such requirement.

September 10, 2024 by Mark Handley

Germany – CJEU rules on appeal against conviction and interpretation of Myanmar sanctions

Further to our earlier post, in 2022 a German individual was convicted of importing timber from Myanmar in breach of EU sanctions and was sentenced to 19 months in jail and a substantial confiscation order of over €3m was also issued.

The case then went on appeal through the German system, and ultimately a referral was made to the Court of Justice of the European Union (“CJEU”).

The argument on the appeals, and for consideration by the CJEU, was that the timber in question underwent sufficient processing in Taiwan, such that it should no longer be considered timber of Myanmarese origin.

The CJEU has ruled that the timber which only underwent “debranching and debarking” was not processed to a level as to amount to a change of origin. The CJEU also held that the timber which was sawn into “wooden cuboids” also did not undergo sufficient processing as to amount to a change of origin.

By contrast the timber which was sawn into finished boards of lumber was held to have undergone sufficient processing to properly be considered of Taiwan origin.

On the referred question of whether the prohibition against goods “exported from Burma/Myanmar” in article 2(2)(a)(ii) of the EU Regulation prohibits imports via third countries, the CJEU held the prohibition “must be interpreted as meaning that that provision covers only goods that have been imported into the European Union directly from Burma/Myanmar“.

It should be noted that this last ruling was in the context of a separate prohibition against the importation of goods which “originate in Burma/Myanmar”, with the court ruling that this other provision was the one which caught imports via third countries.

The German courts will now need to apply these findings to the existing conviction.

September 10, 2024 by Mark Handley

France – trial underway against the captain of a Russian cargo ship for sanctions breaches

The trial of the captain of a Russian cargo ship is now underway in Rouen.

It is being reported that the Rouen Prosecutor’s Office is seeking a fine of €8m, plus confiscation of the ship (valued at €8m) plus a suspended prison sentence of 10 months.

The case arises from the departure from the port of Rouen on 25 February 2022 of the vessel the “Baltic Leader” which was Russian flagged and carrying wind turbines.

Part of the prosecution’s case is that the vessel was ultimately owned and/or controlled by Promsvyazbank which is a designated person under the EU’s Russian sanctions.

August 23, 2024 by Mark Handley

United Kingdom – 12 oil price cap investigations by OFSI

It is being reported (here albeit behind a paywall), that as of April 2024 the UK’s Office of Financial Sanctions Implementation (OFSI) had twelve ongoing investigations relating to possible breaches of the oil price cap imposed as part of the UK’s sanctions against Russia.

The information comes from a Freedom of Information Act request made by the publication Trade Winds. The response is not available on OFSI’s website.

OFSI is also reported to have confirmed that 9 of the twelve investigations were discontinued in April 2024 with no further action taken.

No information was provided on the current status of the other three investigations that were live in April, or whether any further investigations have been commenced since April.

As noted in our previous post from May, at that stage HM Treasury had stated that it “a number of investigations” then ongoing into alleged oil price cap breaches.

August 16, 2024 by Mark Handley

Lithuania – company fined over €1.2m for importing Russian coal and rubber from designated persons

The Customs Office of Lithuania has issued a press release confirming that it has imposed a fine of €1,274,960 on an unnamed Lithuanian company for the importation of both coal and rubber from Russia in breach of EU sanctions.

The Russian suppliers are themselves said to be the subject of sanctions, but have not been named.

The enforcement action was conducted by the Business Entity Inspections Department of the Kaunas Region.

August 14, 2024 by Mark Handley

Lithuania – more than 50 currently-ongoing sanctions investigations

A published interview with Lithuania’s Prosecutor General has stated that the Lithuanian authorities currently have “more than 50 pre-trial investigations into sanctions violations” – including both Russian and Belarusian sanctions.

The interview included mention of the fact that one of the investigations relates to suspected arms smuggling, and that this has been referred to the court for prosecution.

The same article reported on a press release from Lithuania’s Financial Crime Investigation Service of yesterday, which stated that seven individuals and four companies are suspected of unlawful exports to Russia valued at nearly €2 million. Searches of 18 different premises have been conducted as part of this investigation.

It is alleged that attempts were made to mask the unlawful exports with false declarations naming different goods, as well as false destinations for the exports to Turkey, Kazakhstan, Uzbekistan, Belarus.

Details of the other ongoing investigations were not provided.

August 14, 2024 by Mark Handley

Germany – raids in Berlin as part of sanctions investigations

It is being reported (and here) that on Tuesday the Zentralstelle für Sanktionsdurchsetzung (Central Office for Sanctions Enforcement) conducted raids with 100 officers to enforce a District Court judgment on premises in the Tempelhof-Schöneberg region of Berlin.

The reports also state that the subjects of the raids were two logistics companies, said to be from Russia.

No details of the alleged conduct or Russian sanctions breaches giving rise to the raids has been released.

August 14, 2024 by Mark Handley

European Public Prosecutor’s Office conducts Russian sanctions-related raid in Bulgaria

It is being reported (here and here) that the European Public Prosecutor’s Office has conducted a raid on the premises of Bulgartransgaz in Bulgaria.

The investigation is said to concern whether natural gas supplied via the Turkish company Botas may include gas of Russian origin and be being done in circumvention of the EU’s Russian sanctions.

This would be the first public and specific investigation by the European Public Prosecutor’s Office into allegation of sanctions breaches.

August 12, 2024 by Mark Handley

Cyprus – Russian-German national extradited to the US

A press release from the United State’s Attorney’s Office for the Southern District of New York has included details of an arrest and extradition by the Cypriot authorities in support of US charges of sanctions and export control violations.

On 26 August 223, Arthur Petrov was arrested in Cyprus in relation to:

“export control violations, smuggling, wire fraud, and money laundering offenses in connection with his alleged participation in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military”.

Mr Petrov operated the scheme through his Cypriot company Astrafteros Technokosmos LTD.

His extradition from Cyprus was completed and he arrived in the US on 8 August 2024.

August 7, 2024 by Mark Handley

Lithuania – company fined €13.6m for sanctioned exports to Russia

The Lithuanian Customs Service has issued a press release regarding a fine of €13,618,175 imposed on a company.

The company had exported vehicles to Russia through third countries Belarus, Kazakhstan and Turkey.

Six tractor semi-trailers were also confiscated.

Although the Customs press release does not name the company, press reports have identified the company as Biovarda based in Vilnius.

The press release also states, opaquely, that “After the Lithuanian customs started to apply stricter inspection measures, it is not the first time that such sanctions have been applied to companies for violations of the Law on International Sanctions”. No ore detail on these other enforcements was provided.