Dutch Equipment Supplier Fined $2M for Russia Sanctions Violations

A Dutch construction equipment supplier will pay nearly $2 million after the Netherlands accused it of violating sanctions against Russia, the country’s public prosecutor office said last week. The Dieseko Group reached the settlement after the Netherlands said it sold pile drivers and related parts in 2015 and 2016 for the construction of the Crimean Bridge, which linked Russia and Crimea.

Dieseko sold the goods to a Finnish company that then forwarded them to a Russian contractor working on the bridge, the prosecutor’s office said. Dieseko delivered one pile driver, four impact hammers, 12 aggregates, seven vibratory blocks and 12 pipe clamps, the government said, adding that the company “knew the goods were delivered for the construction of the Crimean bridge.” The Dutch company also provided “technical assistance” for the piling machines and parts used to build the bridge, including warranty and repair work and training to employees of the Russian contractor.

The exports violated the EU’s sanctions imposed against Russia in 2014 for its annexation of Crimea, the prosecutor's office said. “Under these sanctions, the sale of goods and provision of technical assistance to individuals and companies in Crimea or for use in Crimea has since been prohibited in certain cases.” It added that the sales “resulted in the construction of the Crimean Bridge (in part) through the use of Dutch knowledge and expertise.”

The prosecutor’s office said the fine was an “appropriate and effective settlement,” noting that Dieseko hadn’t previously been criminally convicted. It also said the company cooperated with the investigation, including by providing records to the government, and put in place new compliance measures to prevent future violations. The prosecutor’s office said the roughly $2 million settlement included a $200,000 fine for the violations and a confiscation of about $1.7 million in “gains” that Dieseko earned from the sales.

In a statement, Dieseko said it “acknowledges the facts and has rendered full cooperation with the investigation” by the Dutch authorities, adding that it hasn’t been “convicted of any criminal offences in the past.” It also said it has “implemented remedial and compliance measures to prevent any recurrence of criminal offences.’

Raymonde Wagemaker, Dieseko CEO, said the company sells its products “in a truthful manner in accordance with applicable laws and regulations and with sharp moral awareness. Unfortunately, this was not the case in the past in relation to this project. We regret this situation and strongly disapprove of it. We offer our sincere apologies in this respect.”

The company said in recent years it has put in place a new employee code of conduct, a policy to screen customers and third parties, a “policy on sanctions and export control” and a whistleblowing policy. It also now has “proactive monitoring of applicable rules to ensure compliance with national, European, and other international regulations.”