Dutch shipbuilder Damen accused of trading with Russia despite sanctions

Russian shipyards obtained hundreds of European components for a major fishing vessel project designed by Dutch company Damen Shipyards, despite strict EU export bans following the invasion of Ukraine, an investigation by NOS Nieuwsuur has revealed.

Through intermediaries in Turkey and Hong Kong, Russia reportedly bypassed the sanctions to source parts for Damen’s crab-fishing vessels. Import data suggests that at least some of these components originated from Damen or were sourced through its supply chain.

Damen maintains it ceased direct shipments to Russia following the implementation of sanctions in 2022. “We believe we have acted fully in line with the sanctions,” the company stated.

In 2023, Damen sold components for fishing vessels to foreign companies but said it included penalty clauses in contracts to prevent the parts from being redirected to Russia. Damen added that all shipments were reviewed by Dutch customs.

Despite these measures, Dutch customs’ POSS (Post-Export Supervision and Sanctions) team launched an investigation, concluding 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.

The Dutch Public Prosecution Service (OM) is now determining whether Damen will face prosecution. Both the OM and customs declined to comment on the ongoing case.

According to Nieuwsuur, three European manufacturers confirmed that their products, exclusively supplied to Damen in the Netherlands, appeared in Russian import data.

Schottel, a German producer of ship propellers, said, “The logistical route of deliveries runs exclusively through Damen.” The company has demanded clarification from Damen and reported the matter to German authorities.

Other manufacturers, including Dutch air-conditioning supplier Heinen & Hopman, disputed the accuracy of the import data. “The source of the data is questionable,” Heinen & Hopman stated. However, Sayari, one of the data providers, defended its records, saying they are consistent with other sources in its database.

The disputed shipments are tied to Damen’s “Project 5712,” a series of 20 modern crab-fishing vessels commissioned by Russian companies in exchange for fishing quotas. Russian President Vladimir Putin described the program in 2022 as a strategic priority for modernizing the nation’s fishing fleet.

Damen designed the vessels and was initially responsible for providing all components. When sanctions took effect, two firms—Yamac Shipping and Logistics Trade, based in Turkey, and FM Corporation Limited, operating from Hong Kong—began handling the shipments.

Yamac Shipping, which shares an address with a subsidiary of Russian shipbuilder MT Group, lacks any record in Turkey’s trade registry and was only established in 2022. FM Corporation, listed at a Hong Kong office complex, similarly has no operational website, but its name is tied to several Russian ships.

A subsidiary of Damen in Russia also played a role in the shipments in 2023, according to Russian business registry records. Employees on LinkedIn referenced their involvement in Project 5712.

Damen acknowledged the subsidiary’s continued operation, stating that it has been working since 2023 to formally exit the Russian market. “Due to restrictive Russian procedures, this has not yet been possible,” the company said.

Sayari, the data analytics firm that provided the import records, flagged patterns indicating sanctions evasion.

“We see shipments with the same descriptions, types of goods, and countries of origin. But now, these goods are suddenly coming from newly established companies in Turkey and China,” said Zachary Tvarozna, Sayari’s director. “This shift occurred just months after shipments from the Netherlands ceased.”

Experts in sanctions compliance have raised questions about whether Damen took sufficient measures to ensure its products would not end up in Russia. Under EU regulations, companies are required to thoroughly investigate potential indirect sales to sanctioned parties.

“You must ask: Am I directly or indirectly trading with a sanctioned party? Is my product being re-exported to the sanctioned country through another country?” said Sebastiaan Bennink, an attorney specializing in international sanctions.