Dutch Damen Shipyards faces prosecution for sanctions violations, bribery, money laundering

The Dutch Public Prosecution Service (OM) has announced that it will prosecute Damen Shipyards, along with its current and two former chairmen, for alleged violations of EU sanctions against Russia, bribery, and money laundering.

The directors under investigation include current chairman Arnout Damen, his father Kommer Damen, who founded the shipbuilding company in 1967, and René B., who served as chairman between 2006 and 2019, Caliber.Az reports via foreign media.

The decision to prosecute follows a seven-year investigation into the company's activities, which initially included an attempt to resolve the case through a settlement and fine. However, negotiations broke down last year after media revelation of new bribery allegations and that Damen had been circumventing sanctions imposed on Russia after its invasion of Ukraine.

The OM suspects that Damen Shipyards continued to supply goods and technologies to Russia over the past three years, potentially contributing to the strengthening of Russia's military capabilities. These alleged activities run counter to EU sanctions targeting Russia.

In addition to sanctions violations, the OM is investigating claims of excessive payments to foreign agents responsible for securing orders. Damen reportedly awarded these agents up to 15 per cent of the total contract value, an unusually high commission for shipbuilding contracts. Such large success fees raise concerns that the agents may have used some of the funds for bribery. When Damen later reduced the commission to 5 per cent, the prosecution alleges that the company and its directors concealed additional payments in their accounting.

If convicted, the consequences for Damen could be severe. Under European Union tendering rules, companies found guilty of such offenses are barred from participating in government contracts for up to four years. Damen is a key supplier for the Dutch Navy, which has placed significant orders with the company to replace its current fleet. The Dutch government has emphasized that its partnership with Damen aligns with national defense policy and aims to strengthen both the Dutch maritime industry and Europe’s strategic autonomy.

In response to parliamentary inquiries, Defence State Secretary Gijs Tuinman (BBB) clarified last month that an ongoing criminal investigation, along with allegations of fraud and bribery, does not automatically disqualify a company from participating in government tenders. However, he did not address the specific charges related to sanctions violations.

By Vafa Guliyeva