Judgment Rules Companies Must Know End Destination of Products

A conviction by a Danish court for violating EU sanctions against Syria has underscored the knowledge governments expect of companies of the end destination of their products.

In the case, it was reported that the defendants did not ship the product directly to the sanctioned country, Syria, but sold it to the Russian military via agents in Russia. The selling began about the same time the Russian intervention in Syria became public knowledge. The judgment said the company should have realized that the fuel was ending up in Syria and stopped the
trades.

As a result, on 14 December 2021, a court in Odense, Denmark, found the seller of the product, Dan-Bunkering, its Danish-based parent company Bunker Holding, and CEO guilty of EU sanctions breaches against Syria.

The Trades: from Russia to the Mediterranean to Syria

According to its website, Bunker Holding group specializes in the purchase, sale and supply of fuel and lube oil to ships. The deals that violated the EU sanctions involved 172 tons of jet fuel shipped in 2015–2017 for use in Syria. Dan-Bunkering did not deliver the fuel directly to Syria. The buyers were Russian companies acting as agents for the Russian navy.

The deals were made by Dan-Bunkering’s office in Kaliningrad, Russia, and delivery took place in the “Eastern Mediterranean” – the summary document we reviewed did not specify where this was.

The court document says that “some of the trades had been reloading the fuel in the space [sic] sea through so-called ship-to-ship operations,” where the fuel was transferred while the ships were side by side at sea.

Ship-to-ship transfers have come under the spotlight as a potential sanctions evasion red flag since 2020, when US and UK sanctions authorities issued advisories directed at the maritime shipping industry.