Being compliant with export control and sanctions legislation is of great importance for companies engaged in international trade as violation of this legislation can lead to severe penalties as well as reputational damage. Companies should therefore be well aware of the risks related to export control and sanctions and take measures to mitigate these risks.
Please find set out below some interesting recent developments concerning EU and U.S. export controls and sanctions.
Expansion EU sanctions Russia
Recently the EU Commission expanded EU sanctions against Russia by adding six companies / entities to the EU sanctions list, due to their alleged role in the supply of gas turbines to the Crimea (EU Regulation 2017/1417). This supply from Russia breached the contractual provisions for the original sale of the turbines from an EU established company to Russia.
The reaction of the EU Commission demonstrates that the EU closely monitors the strict observance of EU sanctions against Russia and is willing and able to act on short notice in case of suspected violations of these sanctions. EU companies with business interests or operations in Russia should particularly be aware of this risk and make sure they mitigate the risk of indirect/direct non-compliance.
Criminal prosecution in the Netherlands as result of alleged violation of Iran sanctions
On August 21, 2017, the Public Prosecution Service in the Netherlands announced that they have asked for a two-year prison sentence for the director of a Dutch company who is alleged to have violated EU sanctions against Iran before these were lifted under the Joint Comprehensive Plan of Action (JCPOA).
Between 2012 and 2015 the Dutch company supplied seals and packings used in the gas industry to the National Iranian Gas Company (NIGC). This supply was prohibited under EU sanctions legislation. In addition, the company is accused of falsifying their accounts and records in order to disguise these transactions.
The District Court in Den Bosch will render judgment in this case on September 4, 2017.
U.S. sanctions against Venezuela
On August 24, 2017, President Trump signed an Executive Order imposing additional sanctions on Venezuela. These sanctions, which expand the sanctions already in place as of March 9, 2015, target the Government of Venezuela and the Venezuelan oil industry for “serious abuses of human rights and fundamental freedoms and the deepening humanitarian crisis in Venezuela”.
The new sanctions prohibit US persons from engaging in certain transactions (e.g. bonds or new debts) on the financial market with the Government of Venezuela.
EU companies with indirect/direct business interests in Venezuela should carefully assess the possible impact of these sanctions in view of the extraterritorial reach of the U.S. sanctions.
We have specialists dedicated to national and international export controls and sanctions, ensuring that we are well-placed to help understand local and global operating requirements and answer any questions you may have in this respect.
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