‘Very Difficult’ to Track Illegally Diverted Exports to Russia, Danish Official Says

Denmark has seen a spike in dual-use exports over the past year to countries suspected of being diversion points for export-controlled goods to Russia, including Tajikistan, Armenia and Georgia, said Frederik Broch-Lips, head of export controls and sanctions with the Danish Business Authority. The agency hasn’t been able to confirm all of those shipments are being illegally sent to Russian end-users, he said, adding that better sanctions enforcement may be needed across Europe.

“It’s very important for the European Union at the moment and the [European] Commission and also for the member states that the sanctions are enforced,” Broch-Lips said during a summit of European government and industry officials in Washington last week hosted by NielsonSmith. “It doesn't work if it can be diverted through some of the countries close to Russia. Then the sanctions don't have any effect.”

Broch-Lips said his agency is closely monitoring information recently released by a Danish think tank that shows “in almost all cases, the exports have increased a lot” to countries with ties to Russia. He said shipments from Denmark in particular have been “skyrocketing up” since Russia’s invasion of Ukraine last year, “especially to Tajikistan and Armenia.”

But he also said the Danish government is finding it “very difficult to have any data” on the exports once they leave Denmark and enter those third countries. “That's the problem -- we lack the data there,” Broch-Lips said. “So we really do not know what is happening with the product. We just have an idea that it could be diverted.”

He said the government is asking itself: “Why is that happening? Why do Georgia or Armenia need a lot of new dual-use products suddenly out of nowhere?”

Broch-Lips said the Danish Business Authority is doing outreach to companies to try to make sure they are aware of their compliance responsibilities whenever the EU announces new sanctions against Russia. But lately, he said, that process has become more difficult: his agency has received a surge in industry questions about the new rules over the last year.

In 2022, the agency received “2,000 questions,” he said, but that has “doubled over the last year. So we have a lot of work to do with trying to answer those questions, and they will be complex and difficult to answer, so it also takes a lot of time. So it is a challenge for us.”