In May this year, the Dutch Public Prosecution Service (OM) announced it would be prosecuting Damen Shipyards Gorinchem and Damen Naval Shipyards for bribery, forgery, money laundering and sanctions violations. The trial is starting today, 24 November.
The criminal offences are alleged to have taken place around the sale of ships abroad, according to the prosecution. (Former) board members are also being prosecuted for de facto directing these criminal acts.
In addition, the OM decided to sue Damen Shipyards Gorinchem for violating the Sanctions Act. This suspicion relates to the violation of sanctions imposed following the war between Russia and Ukraine.
Also read: Damen Shipyards prosecuted for bribery and sanction violations
Separate criminal investigations
The two criminal investigations are separate. The bribery investigation was conducted by the Fiscal Information and Investigation Service (FIOD), focuses on a period from 2006 to January 2017 and involves the payment of high commissions to agents. Those agents were engaged to sell ships to various countries in Africa, Asia and South America.
These commissions create a substantial risk of paying bribes to officials of the countries with which business was done. Over a series of years, a large quantity of fake documents was presumably drawn up in order to conceal high commission payments to agents and frustrate scrutiny thereof, including in applications for export credit insurance.
The investigation into violation of the Sanctions Act was conducted by the Customs Service and concerns goods and technology that could contribute to Russia’s military and technological strengthening and/or to the development of the defence and security sector. This investigation focuses on a period of several months in the second half of 2022. According to Damen, this involves the delivery of several cranes to Russia.
Tension and pressure
Michiel Zwinkels, Chief Public Prosecutor, tells Dutch TV programme Nieuwsuur the case is unique. The Dutch government feels the company is of ‘national strategic importance’ as it builds naval vessels for the Netherlands and other NATO countries. Zwinkels: ‘This adds more tension and puts more pressure on such a case. But when a company that is important to the Dutch defence industry is suspected of circumventing sanctions against Russia, it may be even more important to bring this before the court.’
If Damen Shipyards is found guilty, under European procurement rules, it will be banned from competing for government orders for four years.
Also read: Damen boasts order record, F126 project may shift to German parties
Damen confident in result
Damen has meanwhile issued a statement regarding the case: ‘Damen Shipyards Group has been investigated by the Public Prosecution Service for activities that took place between 2006 and 2016. This investigation has taken place over an eight-year period, and has resulted in a case centred on suspicions of forgery in relation to a number of projects. These allegations relate to a period in time during which Damen undertook in the region of 1500 complex shipbuilding projects worldwide.’
The company adds that it is ‘disappointed by the long duration of this investigation and is anticipating a lengthy legal battle.’ However, Damen states it is confident in the result of the legal proceedings and ‘will finally have an opportunity to explain that the suspicions of the Public Prosecution Service are unfounded.’
The company stresses it has a ‘robust compliance procedure in place’ and that this procedure is ‘recognised by external parties’ while the company is also certified according to the standards for integrity and anti-corruption (ISO).
The company concludes that once the hearing begins, it will defend itself fully in court, not in the media.
Picture: Damen Shipyards Gorinchem (© S.J. de Waard / CC-BY-SA-4.0 via Wikimedia Commons).
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