Netherlands reached settlement with company and director over sanctions violations

Two suspects have agreed to an out-of-court settlement with the Dutch public prosecutor in a case involving alleged violations of the Sanctions Act. The case involved an Amsterdam-based company and its director. According to the prosecution, millions of dollars in dividends were unlawfully paid to a russian company owned by a sanctioned person. In addition, according to the prosecution, a loan was paid to another russian company that is on the EU sanctions list.

The Amsterdam company will pay the state an amount of 195,000 euros. The director of this company, as the actual manager, will pay 20,000 euros. According to the prosecution, the suspects violated the Sanctions Act. These are financial sanctions imposed after the annexation of Crimea in 2014 and before russia's invasion of Ukraine in February 2022.

In total, the Amsterdam-based company paid about EUR 18 million in dividends to one of its two shareholders at the end of 2021. The company in question is russian. The prosecution alleges that the company is owned by an individual subject to russian sanctions. At the time, he was already under financial sanctions imposed by the EU. Therefore, according to the prosecution, dividends should not have been paid. In mid-2019, a loan of more than EUR 100,000 was also repaid to a russian company that was on the sanctions list. Financial sanctions against this company were imposed by the EU in 2018.

In addition, the prosecution believes that the defendants also failed to freeze the shares of their russian shareholder and suspend the voting rights associated with them. This should have been done in accordance with the Sanctions Act, the prosecution claims. The accused company underwent several changes in one of the shareholders and the structure behind it during the charged period. The prosecution believes that the sanctioned russian ultimately always remained the one who controlled the company.

In addition, the prosecution believes that the sanctions were circumvented by misinforming the gatekeeper about the structure behind the russian shareholder of the Dutch suspect company. Gatekeepers play an important role in preventing sanctions violations.

Financial sanctions exist for a reason. Sanctions are important measures to make it clear to countries, parties or individuals that they do not agree with actions that go against international agreements. In this case, we are talking about sanctions against actions in and around Ukraine.

Source: Openbaar Ministerie