We Must Continue the Hunt For Sanctions Violators

Those who exploit international law for their own selfish financial gain, put us all at risk

Sanctions have for a long time been the preferred mechanism of diplomacy for those looking to place pressure on violators of international law. Placing limitations on one’s ability to conduct business, transact and even bank, sanctions seek to highlight the extent to which it does not concretely pay to not respect global norms, with the idea of encouraging violators to reach an amicable resolution to the issue at hand, without the need for more extreme measures.

London, has for centuries been among the world’s foremost business hubs, and as such has also attracted elements looking to take advantage of the city’s international standing to promote its interests, sometimes at the expense of global norms. Successive British governments have sought to ensure that the capital’s good standing is not placed at risk, by those prioritizing their financial gains over legal business actions. In this light, the new Labour government under the leadership of Prime Minister Starmer, has announced a series of reforms that will seek to crack down on tax evaders and specifically those exploiting non-domicile residences status to avoid paying tax, alongside opaque corporate structures that are indeed sometimes merely used to ensure privacy, but at other times, are part and parcel of far deeper and unlawful plots.

The UK, even under the previous administration, made it clear that it intends to put an end to the cynical use being made of the business environment in the United Kingdom for illegal purposes. For example, in April of this year British Foreign Secretary David Cameron led the imposition of sanctions on British entities suspected of helping fund the ongoing conflict in Sudan, including freezing the assets of Alkhaleej Bank, Al-Fakher Advanced Works and Red Rock Mining.

Foreign Secretary Cameron said in a statement: “The businesses that support the warring parties must be held to account, alongside those responsible for human rights abuses.  The world must not forget about Sudan. We urgently need to end the violence.” The measures were imposed to both ensure that London is not exploited as a center through which financial transactions that fuel violence are conducted and to highlight British leadership on the African continent”.

The United Kingdom is not the only global financial center which has been exploited by those seeking to earned profit at the expense of global international regulations and the well-being of the international community. Switzerland has been similarly victimized by a range of elements engaged in unlawful activities who have looked to exploit the privacy afforded by its financial system to carry on with their respective, illicit, activities, often in contravention of international sanctions.

Niels Troost, a Dutch businessman residing in Geneva is one such example, having been sanctioned by the UK for his trading in sanctioned Russian oil. Through a UAE based company of which he was the ultimate beneficial owner, Paramount DMCC, Niels Troost made upwards of 20 million a trade, according to reports, acquiring sanctioned Russian oil that nobody else was willing to purchase at below market costs and selling this onwards for unfathomable profit. Niels Troost alongside his business partner, Francois Edouard Mauron, were sanctioned by the UK and have been accused of facilitating the continuation of Russia’s war of destruction in Ukraine, which commenced already 2 and a half years ago. Close connections to the Kremlin have been reported and specifically to the Wagner group, founder Gennady Timchenko. The case is still developing and it is unknown if Niels Troost’s trade in sanctioned Russian oil continues or has ceased.

Sanctions violators, and those who violate international norms more broadly put the entire business community at risk. For international financial markets to thrive there is a level of trust which must be present. Otherwise, valuable resources are expended in conducting levels of due diligence which would otherwise be unnecessary, seeking to avoid exposure to secondary sanctions and those who break the law. We must continue to severely crack down on those who put our internal global financial system at risk.