The first case on this site prosecuted in an EU court. The judgments are in Dutch and anonymise the defendants, so this page names neither; the translations are this site’s.
What was exported
The Rotterdam District Court found that between 25 February 2022, the date the relevant sanctions applied, and 27 September 2022 the company exported electronic goods to three Russian companies. Counting only what could be proved to fall under the sanctions or the dual-use rules, the court worked from eleven types of goods, in a little over fifteen shipments over seven months, with a trade value of over €1.4 million. It had examined 131 types of goods in all and concluded that “a large part” of what was exported to Russia was not covered by the sanctions law; it declined to assume that goods it had not examined were sanctioned.
The court found proven the sale and export of a type of integrated circuit that is a dual-use item, the sale and export of nine other types of integrated circuit listed in Annex VII of Council Regulation 833/2014, whose export to Russia is prohibited, and intentional participation in activities aimed at circumventing those prohibitions. It acquitted the company on charges relating to drones: it had ordered and paid for five Mavic 2 drones, the order could not be filled quickly, and it cancelled and was refunded, so there was no sale and no beginning of an attempted delivery.
The Maldives invoices
The circumvention finding rests on a second count, forgery. Eight invoices named a company on the Maldives as the customer. That company, according to the judgment, handles transhipment between incoming and outgoing aircraft. The actual customers were the three Russian companies. The managing director gave evidence that he saw the Maldives name on the invoices and knew who the real customers were, and the court found he had changed the name himself: on 9 September 2022 he received an invoice from an employee of one Russian buyer that named another Russian buyer as the customer, and on 13 September he edited the file to replace that name with the Maldives company’s, corrected a spelling error in it, signed it on the company’s behalf and sent it to the freight forwarder.
The defence argued that the invoices were not false: they showed the Maldives as the destination, that is where the goods went, and everyone knew it was not the final destination, since many documents said “in transit” and gave Russia as the ultimate destination. The court rejected this. The invoices named a customer that was not the customer, and the director’s own edit showed he knew the customer’s name was being hidden behind another.
A point about proof
The defence also argued that because the goods themselves had never been examined, and a small deviation from a specification can take a product outside the sanctions, the company should be acquitted of the whole. The court’s answer is worth knowing: the starting point is that goods delivered meet the specifications in the accompanying documents, and that starting point holds unless there are signs to the contrary. Here there were none, and no correspondence with the Russian buyers suggested any shipment was incomplete or off-specification, which the court said would be expected if it had been. In other words, the invoices were evidence against the company that issued them.
The sentences
The prosecutors sought 36 months’ imprisonment for the director and a €350,000 fine on the company. The court imposed 18 months, unconditional, and €200,000. It gave “general prevention” as the purpose, “preventing companies from ignoring and evading sanctions”, and it reduced the fine from the prosecutors’ figure because of the acquittal on the drones and because it could not say what share of the exports was lawful. This page covers the first-instance judgments only and does not describe any appeal.
What it shows for detection
The transshipment technique here is a paper one. The goods were exported from the Netherlands by air freight with the Maldives as the stated destination, and the defence itself said everyone knew that was not the final destination. The only thing standing between the shipment and its true end user, for anyone who was not in the know, was a customer name on an invoice. The transshipment page describes the same pattern from the side of the customs authority and the freight forwarder that received the invoice, who have only that document to go on.