Verdict in the Dan-Bunkering case

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Earlier today, the Court of Odense, Denmark, reached a verdict in the Dan-Bunkering case charged in November 2020 for violating EU sanctions by selling 172.000 tons of jet fuel to two Russian companies, acting as agent for the Russian Navy, that had passed on the jet fuel in the Syrian port of Port Banias, after which the jet fuel had been used by the Russian Air Force for military operations in Syria between 2015 and 2017.     

The Court found that the supplies objectively constituted infringements of EU sanctions. Dan-Bunkering and its parent company Bunker Holding were fined DKK 30 million (around 4 million €) and DKK 4 million (around 500.000 €) and its CEO was sentenced to four months in prison (suspended). In addition, DKK 15 million worth of profits were seized. Prosecutors have argued that Dan-Bunkering knew or should have known that the Russians entity bought the jet fuel for use in Syria due to several red flags:

🚩 Dan-Bunkering knew that the two companies were agents of the Russian Navy, so the jet fuel was certainly used by the Russian military.

🚩 The sales happened at the same time as Russian fighter jets were deployed in Syria in the autumn of 2015.

🚩 The jet fuel was to be delivered in the eastern Mediterranean, not far from Syria.

🚩 The Danish Business Authority warned the company in 2016 about the potential link to Syria (after which the company conducted an internal investigation). The Danish company will likely appeal before the High Court.

Lessons learned:

✔ Your due diligence shall go further than a simple screening and take into consideration the publicly available negative news and the global environment especially when a there is a link with the military sector.

✔ The end-use and end-users in your transactions shall be known as EU sanctions usually provide for direct and indirect prohibitions.

✔ Strong compliance clauses shall always be included in your contracts. This ruling is part of a more general trend among Member States to implement EU sanctions.

Binder1

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