Author: Dr. Angelika Hellweger
4 September 2023
2 min read
Angelika Hellweger of Rahman Ravelli assesses the German action and the wider issue of sanctions circumvention.
German authorities have stated that a German-Russian national has been arrested on suspicion of exporting components used by Russia in the production of military hardware.
The announcement was made by Germany's prosecutor general, as the case was escalated from state to federal level. The defendant, who has only been named as Waldemar W, has been in pre-trial detention since March 9.
Waldemar W is accused of violating sanctions imposed in the wake of Russia's invasion of Ukraine last year. Between January 2020 and March 2023, he is alleged to have exported electronic components on 26 occasions to a Russian company that is involved in the production of military hardware. This hardware is said to include the Orlan-10 reconnaissance drone, which was designed in St Petersburg for the Russian military and has been used in both Ukraine and Syria.
Germany’s prosecutor general Peter Frank has said he has become involved in the case because of its "special importance’’.
His involvement comes at a time when German authorities are taking an increasingly tough approach regarding those suspected of circumventing sanctions. Just over a week ago, the former head of a company in Baden-Württemberg was arrested and accused of having supplied machines for the manufacture of sniper rifles to Russia.
The action taken by the German authorities is in line with the European Union’s (EU’s) increasing focus on tackling sanctions circumvention. This involves the individual member states carrying out the enforcement, with the EU having nearly exhausted all the sanctions restrictions it can impose to counter Russian action in Ukraine.
When it comes to sanctions compliance, one notable circumvention “red flag” is the participation in the transaction of persons or organisations from countries that have not imposed sanctions against Russia. A number of these countries are states that were once part of the former Soviet Union.
A typical scenario would involve a product that is prohibited from being exported to Russia being purchased by a person from a third country before it then enters Russia. Companies that were either established after February 2022 or have a limited internet presence need to be scrutinised carefully. This is especially the case if such companies are dealing with dual-use goods – items that can be used for both civil and military purposes.
Companies that are generous with their fees when it comes to hiring lawyers and consultants who assist in transactions also need to be checked thoroughly, as do those whose company structure is complex or unclear. This is especially the case if a company has been restructured or undergone ownership changes since the start of the invasion of Ukraine.
Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.