Danish companies risk violating sanctions against Russia without knowing it, as they are deceived and misled by shell companies and fictitious recipient countries.
This is the message from Danish Industry, which regularly receives inquiries from member companies and exporters who need help to understand a trading partner or deal before it is activated.
»We also experience being directly contacted by foreign companies seeking our help to obtain a Danish export permit. And sometimes we have to conduct quite thorough checks on the companies contacting us«, says Peter Bay Kirkegaard, senior chief consultant at Danish Industry.
»In some cases, it is necessary to involve PET (the Danish Security and Intelligence Service, ed.) because there is a risk that Danish products could end up in the Russian arms industry«.
From Herning to Moldova
Last fall, Danish Industry was contacted by what appeared to be a Canadian company asking for help to obtain a Danish export permit. The company needed the permit to purchase a Danish CNC machine, which can create metal tools in many shapes and figures.
The machine was located in Herning but, according to the Canadian company, was to be sent to the Eastern European republic of Moldova, situated between Romania and Ukraine, where the machine was reportedly intended to produce parts for agricultural machinery.
However, when Danish Industry checked the company’s address, it turned out to be an apartment complex in Toronto. Meanwhile, the phone call when the company contacted Danish Industry was traced to the U.S. state of Pennsylvania.
Therefore, the case was referred to PET.
»All sorts of tricks are used in attempts to obtain components for the Russian arms industry. Although we have relatively few cases in Denmark, our companies need to be vigilant and critical when selling goods abroad. The actual trading partner may be hidden behind a maze of shell companies designed to hide the recipient country«, says Peter Bay Kirkegaard.
Companies charged with violating sanctions
According to the newspaper Berlingske on Monday, Danish police have charged 11 companies and 7 individuals with violating sanctions against Russia since the country invaded Ukraine in the winter of 2022.
This is the first time the police have shed light on the number of Danish companies and citizens who have been or are charged with trading with Russia in violation of stringent EU sanctions, writes Berlingske, which has seen information in a note from the Danish National Police.
In August, the Danish Business Authority informed DR that 135 Danish companies had exported goods to third countries where there could be a risk of sanctions violations because the goods could be redirected to Russia. This included countries like Armenia and Kazakhstan.
»It’s particularly in cases where Danish companies export to countries close to Russia that one needs to be cautious, simply because it can be difficult to understand who you are actually dealing with. Fortunately, the statistics show that there are relatively few cases in Denmark compared to other countries«, says Peter Bay Kirkegaard.
Flügger under police investigation
In June, it was revealed that the paint company Flügger is under police investigation following revelations about sales in Russia.
This announcement came after DR revealed that Flügger’s products were actively marketed in several Russian cities, including at numerous trade fairs, and that Flügger’s paint could be purchased both online and physically in stores in Russia.
Flügger acknowledged that the company’s products had been sold ’after the introduction of the sanctions rules, but claimed to have been deceived by a distributor in Eastern Europe.
The company has stated that it ended its cooperation with distributors in Kazakhstan, Estonia, Azerbaijan, and Kyrgyzstan last winter.
