Arrest on Counts of Suspected Violations of the Foreign Trade and Payments Act

Year of issue 2023
Date 24.08.2023

On 22 August 2023, the Federal Public Prosecutor’s Office had agents of the Stuttgart Customs Investigations Office arrest

the German national Ulli S.

upon his arrival at Frankfurt am Main International Airport in execution of an arrest warrant issued by the Investigating Judge at the Federal Court of Justice of 15 June 2023. The suspect had been in custody in France since 10 August 2023 following a European Arrest Warrant and was subsequently extradited to Germany to face prosecution.

The suspect is strongly suspected of several counts of commercial violations of the Foreign Trade and Payments Act (section 17 paras. 1 and 2 no. 2 of the Foreign Trade and Payments Act; section 18 para. 1 no. 1 a), para. 5 no. 2, para. 7 no. 2 of the Foreign Trade and Payments Act in conjunction with the relevant EU provisions).

In essence, the arrest warrant sets out the following facts:

Ulli S. was the manager of a Baden-Württemberg-based company specialising in the production and trade of modern machine tools. In this context, he maintained long-standing business relations with Russian arms manufacturers. As a result of the Russian annexation of Crimea, the European Union imposed wide-ranging trade restrictions in 2014, which did not only enact an arms embargo but also prohibit the export of dual-use goods (Council Decision [EU] 2014/512/CFSP of 31 July 2014 and Council Regulation [EU] No 833/2014).

In spring 2015, the suspect concluded three contracts with a Russian arms manufacturer about the shipment of six machine tools in total, including accessory components. The machines were required for the serial production of sniper rifles. Ulli S. used other companies, which he had founded, as well as another Russian enterprise to conceal his business dealings. The shipments were made in summer and autumn 2015 and facilitated via third companies in Switzerland and in one case via Lithuania. The contract volume of the machine sale amounted to approximately two million Euros. Another contract concluded with the Russian arms manufacturer also included the machines’ configuration as well as employee training courses. Associates of the suspects provided said services in 2015 and 2016.

The suspect acquired likewise four sniper rifles for testing purposes worth 22,000 Euros via his company from the Russian business partner and imported them into Germany. By antedating the purchase order by one year, Ulli S. dissimulated that the old contract had, in fact, been subject to the embargo.

The suspect was brought before the Investigating Judge at the Federal Court of Justice yesterday who read out the arrest warrant to him and decided for pre-trial detention to be put into effect.