US Targets Russia-Related Procurement Network With New Sanctions, Entity Listings

The U.S. this week announced new sanctions and export controls against a host of companies and people for violating export restrictions against Russia, including a Belgian businessman and his defense component procurement network. Along with new Treasury Department sanctions, DOJ said it was preparing to release two indictments against the man, Hans De Geetere, and the Bureau of Industry and Security added De Geetere, his affiliated companies and other unrelated parties to the Entity List for illegally supplying Russia’s military and defense industrial base.

In total, BIS added 42 parties to the list -- most unrelated to De Geetere -- for either helping to illegally supply parts and drones to Russia’s military, performing contracts for Russian government entities or for doing business with sanctioned companies. The companies and people added to the list are located in China, Cyprus, Germany, Kazakhstan, the Netherlands, Russia and the United Arab Emirates.

Effective Dec. 7, the companies will face license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed under either a policy of denial or presumption of denial, with some exports of food and medicine subject to a case-by-case review. Several of the new entities were also designated as a Russia/Belarus-Military End User and made subject to foreign direct product rule licensing restrictions.

De Geetere either owns or has direct ties to five companies that were added to the Entity List: Belgium-based Knokke Heist Support Corporation Management and European Technical Trading BV; Cyprus-based Eriner Limited and The Mother Ark Ltd; and Netherlands-based Hasa Nederland B.V. BIS said De Geetere and those entities acquired and “illicitly diverted” U.S.-origin electronic components on behalf of parties in China and Russia, including components used in missiles, unmanned aerial vehicles, electronic warfare receivers and military radar.

The agency also said De Geetere “falsified official documents” and gave false end-user information to U.S. and foreign companies to evade export controls and sanctions. He also used those fake documents for export license applications, BIS said. Those companies will be subject to a license review policy of presumption of denial.

In total, Treasury said De Geetere used a network of nine entities and five people across Russia, Belgium, Cyprus, Sweden, Hong Kong and the Netherlands to illegally procure electronics with military applications -- including “high-priority semiconductors” -- for Russian end-users. Along with acting as the director of companies across Belgium, Cyprus and the Netherlands, he also helped Hong Kong-­based M and S Trading ship electronics to Russia, Treasury said.

He also indirectly used other companies as part of his procurement network, the agency said, including European Technical Trading, which is owned by his brother, Tom De Geetere, who Treasury also sanctioned. The agency also designated Russian national Vladimir Kulemekov for helping to coordinate some of the network's electronics orders for Russian companies; Kulemekov’s associate, Sergey Skvortsov; and Kimberley Beun, a Belgium-based Dutch citizen who handles “financial affairs” for Eriner. Treasury also sanctioned Cyprus-based Lar Vorto Services Limited, which it said is on the board of multiple De Geetere-led firms, including Ahetei Limited, which was used to try to buy U.S.-origin accelerometers.

Along with the sanctions, Treasury said DOJ was preparing to unseal two indictments related to De Geetere’s "years-long scheme" to illegally export sensitive, military-grade technology from the U.S. to end users in China and Russia. Those indictments weren’t available as of press time.

Aside from De Geetere’s procurement network, BIS targeted other companies for illegally exporting to Russia, including several in Armenia, Cyprus, Russia and the United Arab Emirates for allegedly sending U.S.-origin avionics equipment to the Russian government or military end users, both before and after the country's invasion of Ukraine last year. Others were added for performing contracts for Russian government entities -- including entities in the Russian defense sector -- or for doing business with companies on the Entity List or sanctioned by Treasury.

BIS singled out China-based Planet Technology for procuring U.S.-origin items for Russia that were later recovered from a downed Iranian drone used by Russia in Ukraine. The agency designated Planet Technology and others as Russian or Belarusian military end users, subjecting them to the Russia/Belarus-Military End User FDP rule, which imposes on them additional license requirements for certain foreign-produced items made with U.S.-origin technology or software.

All exports that now require a license as a result of this rule but were aboard a carrier to a port as of Dec. 7 may proceed to their destinations under the previous eligibility as long as the items are exported before Jan. 8, BIS said. Any items not exported before midnight Jan. 8 will require a license.