Despite new waves of restrictions, sanctions evasion efforts by Russia show no sign of waning. One such recent example was reported in December 2024 by Nieuwsuur, a Dutch current affairs television program.
Read on for more about Nieuwsuur’s investigation and their use of Sayari data to provide key intelligence to their reporting.
A new project to drive the Russian economy
Before Russia’s invasion of Ukraine, President Putin deemed the fishery sector important to Russian employment and social-economic development. In response, Russian companies began efforts to replace outdated ships, building new crab fishing vessels in exchange for catch quotas. Putin identified the renovation of the fleet as “one of our main strategic priorities” in 2022.
The Russian state dubbed this ship renovation initiative “Project CCa 5712LS.” The Damen Group, a private Dutch defense, shipbuilding, and engineering company headquartered in the Netherlands, is a key player in this initiative. Their Damen Shipyards designed these new Russian vessels, type 5712 LS and 5712 P, and parts for these vessels come from hundreds of suppliers to Russia through Damen.
Identifying sanctioned products in Project 5712
Even before Russia’s invasion of Ukraine, the EU acted in response to the 2014 illegal annexation of Crimea and Sevastopol and the deliberate destabilization of Ukraine. Since then, additional sanctions have been applied, and new Harmonised System (HS) codes are regularly added to these sanctions.
The HS codes of products shipped for Project 5712 often fall under Article 3 of the European Regulation 833/2014, a sanctions provision that prohibits companies from exporting to Russia any products that “could contribute to strengthening the industrial capacity of Russia.” Parts for fishing vessels could potentially also qualify as “dual use.”
Nieuwsuur, using Sayari’s database, analyzed the HS codes of products shipped for Project 5712. Sayari trade data includes:
- Product description, weight, quantity, price, and manufacturer
- Recipient paying for the products and the shipping address
- Product shipper, country of origin, and the location from which the products were shipped
The Nieuwsuur investigation specifically looked at codes added to sanctions lists in February 2023. Adding a buffer of a few months, Nieuwsuur identified shipments made after June 2023 as potential sanctions evasion.
Before sanctions, Nieuwsuur saw that shipments for Project 5712 went to Russia through Damen. This changed after the sanctions.
Tracing Project 5712 supplies into Russia post-sanctions
So, how did these sanctioned components end up in the Russian vessels?
Interviewed by Nieuwsuur, Director of Analytic Services Zachary Tvarozna noted “We see shipments with the same descriptions, the same types of goods and the same countries of origin. But now suddenly coming from newly established companies in Turkey and China. And that just a few months after they are no longer shipped from the Netherlands.”
Data shows that two transport companies assumed Damen’s role as a shipper of parts once the sanctions came into effect:
- Turkish Yamac Shipping and Logistics Trade. Nieuwsuur discovered this company is not in the Turkish Chamber of Commerce. In addition, the company website did not exist before 2022, suggesting it was established after Russia’s invasion of Ukraine. The company shares an address with a subsidiary of the Russian shipbuilder MT-Group.
- FM Corporation (China) Limited. This shipper is located in an office building in Hong Kong and has no website. Nieuwsuur noted that several Russian vessels are registered in this company’s name, and a contact address indicates a possible connection with a company that ordered the vessels from Damen.
Nieuwsuur then moved beyond trade data to verify if goods on sanctioned lists were present on ships. Nieuwsuur reviewed Russian promotional videos showing ship propellers made in Germany. Before sanctions, these propellers came through Damen; after sanctions, they were shipped via Turkey and China.
The German propeller manufacturer and three other European manufacturers confirmed their products were supplied exclusively for Damen. Suppliers interviewed by Nieuwsuur said that they did not send their products directly to Russia or other countries. After viewing trade data, the German manufacturer reported possible sanctions evasion to German export authorities.
After initially questioning the data, Damen confirmed to Nieuwsuur that some parts for fishing ships were sold to foreign companies in 2023. Damen stated these parts were checked by customs and had stipulations and penalty clauses in place to ensure the products were not sent to Russia.
After investigating, the Dutch customs’ Post-Export Supervision and Sanctions (POSS) team concluded that illegal exports may have occurred. “There are indications of criminal export activities involving components for fishing vessel construction,” sources familiar with the investigation told the NOS, a Dutch public service broadcaster.
As part of their reporting, Nieuwsuur shared Damen’s response to reporters’ questions.
Using public records, trade data, and social intelligence for due diligence
European Union (EU) regulations require companies to thoroughly investigate potential indirect sales to sanctioned parties. The EU guidance on such due diligence recommends a risk-based approach consisting of risk assessment, multi-level due diligence, and ongoing monitoring.
This due diligence – and the ability to document due diligence as proof – is critical. Given the current regulatory landscape, companies must know the end users of their products.
The Nieuwsuur story illustrates how the combination of public records, trade data, and social media intelligence techniques can be used to derive a full picture of supply chains and verify regulatory compliance. Sayari data helped Nieuwsuur uncover information critical to their investigation and conclusion.
Sayari’s model of commercial relationships, which connects billions of entities across multiple languages and includes import-export data from more than 70 countries, is the most comprehensive in the world.
Sayari Graph, a solution for investigating complex corporate networks, enables regulators and the regulated to quickly generate filterable, product-specific downstream supply chains based on real shipping data to enhance monitoring and due diligence processes while ensuring adherence to export control laws and sanctions. Advanced search in Graph allows users to search by HS code, buyer country, supplier country, and more. Graph delivers complete citations for all findings, enabling businesses to easily substantiate their due diligence.
To learn more about how Russian sanctions evasion is evolving – and how governments, financial institutions, and other stakeholders can leverage public data to identify and disrupt these schemes – watch our webinar Emerging Typologies in Russia’s Evolving Sanctions Evasion Schemes.
