In the Netherlands, the District Court of the Hague ruled that the Dutch Government does not have to stop supply of F-35 parts to Israel. At an European level, the necessary steps have been taken to adopt the 12th package of restrictive measures against Russia. The United States of America (“US”) have implemented numerous sanctions against various European entities for their involvement in actions that support Russia’s war effort. In the United Kingdom (the “UK”), a new government unit has been announced, designed to crack down on companies evading trade sanctions.
1. The Netherlands
- The Netherlands – Dutch government may continue to supply F-35 parts to Israel – On 15 December 2023, the District Court of the Hague ruled in a summary proceeding that the Dutch Government was not obliged to halt the delivery of F-35s parts to Israel. In 2016, the Dutch government has established General Permit NL009 (Regeling Algemene Vergunning NL009). In short, this permit applies to export within the framework of the F-35 programme. Within the dispute, the question was addressed whether the Dutch government had an obligation to reassess the permit granted in 2016 in light of the current geopolitical situation in Israel. The Court ruled that, under international humanitarian law, the Dutch government indeed has such an obligation. However, this assessment is largely a matter of politics and policy, and the responsible minister has a large degree of freedom in this respect. The Court concluded that, under the circumstances, all relevant interests were carefully weighed up. As such, the supply of F-35 parts may continue.
2. European Union
- EU – The EU has agreed on a 12th package of sanctions – On 14 December 2023, the European Union (“EU”)leaders welcomed the 12th package of sanctions, which includes restrictions on the import, purchase and transfer of diamonds from Russia. Further, the package aims to strengthen cooperation with third countries in an effort to impede sanction circumvention. A more detailed briefing will follow when the directive is published in the official journal.
- EU – EU Council and Parliament reach political agreement to criminalise violation of EU sanctions – On 12 December 2023, the Council and the European Parliament came to an agreement for an EU law which introduces criminal offences and penalties for violation of EU sanctions. The law stipulates what member states will need to define as a criminal offence, including helping persons to bypass a travel ban, trading sanctioned goods, providing prohibited financial services and covering up sanctioned ownership. When violations happen intentionally, penalties must provide for a prison sentence, but may include fines as well. For legal persons, penalties include the disqualification of business activities and withdrawal of permits and authorisations. This would only be the case, however, when the offence is committed to their benefit, and by a person with a leading position in the organisation. Last, member states must take adequate measures to provide for stricter law enforcement.
- EU – Italy, France and Germany called on the EU to impose ad hoc sanctions against Hamas – On 11 December 2023, the three member states wrote a joint letter to EU’s foreign policy chief Josep Borrel, stressing the importance of swift action against Hamas and its supporters for the October 7 attacks. A prompt adaptation of this sanction regime would underline the EU’s commitment against Hamas and their solidarity with Israel, the member states argued. Last week, on 7 December, the EU already added two individuals to the EU terrorist list in response to the 7 October attacks. On the contrary, Belgium, Ireland and Spain co-wrote a letter to the European Council President Charles Michel calling for sanctions against “violent Israeli settlers” in the West Bank.
- EU – EU sanctions persons and entities from Iran for their military support of Russia’s war efforts in Ukraine – On 11 December 2023, the EU imposed restrictive measures against 6 persons and 5 entities involved in Iran’s development and production of unmanned aerial vehicles (“UAV”) used in Russia’s illegal war of aggression against Ukraine. These actions are the first under the newly established sanctions framework which allows for measures in light of Iran’s military support to Russia’s war efforts. The listing includes Iranian companies engaged in the production of UAV components, and several of their executives.
3. United Kingdom
- United Kingdom – The UK has announced the creation of new government unit called the Office of Trade Sanctions Implementation – On 11 December 2023, the UK government announced a new unit to “clamp down” on companies evading sanctions. The unit will be responsible for the enforcement of trade sanctions, complementing the already existing Office of Financial Sanctions Implementation. The press release states that the newly formed unit will “help businesses comply with sanctions and investigate potential breaches, issuing civil penalties and referring cases to HMRC for criminal enforcement where needed”.
4. United States of America
- US – US imposes sanctions on European entities involved in Russian Defense Procurement Network – On 5 December 2023, the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”), sanctioned numerous individuals and entities from Russia, Belgium, Cyprus, Sweden, Hong Kong, and the Netherlands. This network, led by Belgium-based Hans De Geetere, is involved in procuring electronics with military applications for Russian end-users. These products include high priority semiconductor devices sought by Russia for its weapons programs. Simultaneously, the Bureau of Industry and Security (“BIS”) added 42 entities to the Entity List, some of which the same entities and individuals who were designated by OFAC.
- US – OFAC settles with Nasdaq for apparent violations of Iran sanctions by former subsidiary – On 8 December 2023, Nasdaq agreed to pay more than $4 million as part of a settlement with OFAC, for multiple Iran sanctions violations at the former Armenian subsidiary. Nasdaq OMX Armenia, the former owner and operator of the Armenian Stock Exchange violated sanctions by allowing the designated Iran’s state-owned Bank Mellat access to its platform. The settlement highlights the extended jurisdiction of US Iran sanctions, as they, in contrary to most other US sanction regimes, apply to non-U.S. subsidiaries of U.S. companies as well.
- US – Publication of joint compliance note by DOJ, BIS, DDTC and OFAC highlighting common evasion tactics and compliance best efforts – On 11 December 2023, the Department of Justice (“DOJ”), Department of Homeland Security’s Homeland Security Investigations (“HSI”), Department of State’s Directorate of Defense Trade Controls (“DDTC”), OFAC and BIS published a joint compliance note outlining certain tactics commonly deployed by malign actors engaged in sanction evasion, as well as steps that economic actors can take to ensure compliance with US sanction law.
5. Around the Globe
- Russia – Russian government is given the power to expropriate foreign companies – On 11 December 2023, news reports stated that the Duma, the lower house of the Federal Assembly of Russia, has passed legislation that will allow the government to nationalize property and assets of foreign companies, temporarily or permanently, as of January 1, 2024. The law will take effect retroactively as of 24 February 2022, the day the Russian army initiated their full-scale invasion of Ukraine.
Questions?
Should you wish to receive more information about one of the topics described in this newsletter, please contact BenninkAmar Advocaten via e-mail at info@batradelaw.com or via telephone at +31203085918.