Business

Dan-Bunkering, Bunker Holding and CEO guilty of Syria sanctions violations; fined USD 5.17 million in total

Dan-Bunkering was fined USD 4.56 million; Bunker Holding received a USD 610,000 penalty while its CEO Keld R Demant faces a conditional prison sentence of four months in prison, according to court judgement.

Published

3 years ago

December 14, 2021

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Disclaimer: An online translation service was used in the production of the current editorial piece which is based from the Court of Odense’s judgement.

The Court in Odense on Tuesday (14 December) found Dan-Bunkering, Bunker Holding and its CEO guilty of sanctions violations where the parties negligently supplied a total of approximately 172,000 metric tonnes (mt) of jet fuel for use in Syria, according to the judgement seen by Manifold Times.

The violations specifically relate to eight trades of jet fuel that took place in the period between the period of February to May 2017.

Dan-Bunkering was found to had sold jet fuel to two Russian companies which were general agents for the Russian navy and conducted a total of 33 trades with deliveries to the eastern Mediterranean in the period between October 2015 to May 2017.

In all cases, the trades were concluded from Dan-Bunkering’s branch office in Kaliningrad, Russia.

A review of the trade documents, mails, unloading documents and AIS data proved the Russian companies, after receiving the jet fuel from Dan-Bunkering, had delivered the jet fuel in the Syrian port of Port Banias after which the jet fuel had been used by the Russian air force for military operations in Syria.

“The Court found that the deliveries objectively constituted infringements of EU sanctions,” stated the judgement.

Opinion of the judges at court

The majority of the judges found it was “overwhelmingly probable” that Dan-Bunkering must have realised the jet fuel would be used by the Russian military in Syria for all 33 trades, according to the judgement.

Further, since the trades were entered into by Russian employees at Dan-Bunkering’s branch office in Kaliningrad the staff must have been aware of the Russian intervention in Syria.

It was also emphasised the two Russian companies had not purchased jet fuel from Dan-Bunkering prior to October 2015; based on the amount of jet fuel delivered and on Dan-Bunkering’s knowledge that the two companies were general agents of the Russian fleet – the jet fuel should be used by the Russian military.

The minority at the court found that since one Russian company was sanctioned by the US authorities from September 2016, it was only after that date which Dan-Bunkering committed an intentional violation of EU sanctions.

The same group also agreed Dan-Bunkering negligently violated sanctions as the company should have realised the Russian companies supplied jet fuel for use in Syria which is in violation of EU sanctions.

Unanimously, the judges found Bunker Holding and Keld R. Demant to have contributed to a negligent violation of EU sanctions. Both should have stopped trading with the Russian company after the Danish Business Authority's inquiry to Dan-Bunkering in December 2016, and after internal investigations by the group.

Prosecution and defence’s recommendations to the judge

The prosecution demanded Dan-Bunkering, Bunker Holding and its CEO be sentenced in accordance with the indictment.

They argued Dan-Bunkering should be fined DKK 319 million (USD 48.54 million) corresponding to approximately half of the amount for which jet fuel had been sold.

Bunker Holding should be fined DKK 81 million (USD 12.32 million) while its CEO Keld R. Demant should be punished with imprisonment for two years, according to principles related to the eight trades of jet fuel.

Lawyers representing the defendants maintained their claims of acquittal and argued a possible fine to the companies was to be calculated on the basis of the companies’ profits from the trades which amounted to less than 3%.

Court’s judgement

By the court's judgment, Dan-Bunkering was fined DKK 30 million (USD 4.56 million), and Bunker Holding received a DKK 4 million (USD 610,000) fine.

Both fines are measured on the basis of the companies' profits from the trades; the fine for Dan-Bunkering’s intentional violation of the rules is measured at approximately double the profit, while the fine for Bunker Holding’s negligent infringement is measured so that it roughly corresponds to the profit of the last eight trades of jet fuel.

CEO Keld R. Demant has been sentenced to four months in prison, which has been made conditional.

The court also emphasised, amongst other things, that Keld R. Demant is only punished for negligent violation of the sanctions.

In addition, Dan-Bunkering has confiscated the dividends from the traders which have been calculated by the court to be approximately DKK 15.65 million (USD 2.38 million).

Editor’s note: The judgement from the Court in Odense written in Danish can be found here.

Note: Earlier Manifold Times coverage regarding Bunker Holding/Dan-Bunkering’s alleged breaches of EU sanctions can be found below:

Photo credit: Sasun Bughdaryan on Unsplash
Published: 14 December, 2021

Business

Shell MGO bunker heist: Bunker clerk pleads guilty to helping Sentek acquire misappropriated fuel

Wong Wai Meng, who received more than USD 286,000 from Sentek Marine & Trading for his assistance, pleaded guilty to 12 counts of intentionally helping the firm acquire the misappropriated marine gas.

Published

8 hours ago

December 2, 2024

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A bunker clerk, Wong Wai Meng, who received more than USD 286,000 (SGD 384,681) from Singapore-based Sentek Marine & Trading (Sentek) for his assistance, pleaded guilty to 12 counts of intentionally helping the company acquire misappropriated marine gas oil, The Straits Times reported on Friday (29 November).

The 58-year-old Singaporean was employed at the Sentek when he assisted in acquiring more than 28,000 metric tonnes (mt) of the misappropriated fuel worth USD 13.58 million (SGD 18.26 million).

Wong committed the offences over 46 occasions between August 2014 and December 2017.

Wong is among the three bunker clerks previously employed by Sentek, who were charged for offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Prevention of Corruption Act (PCA).

Another bunker clerk among the three charged, Wong Kuin Wah, 61, was sentenced to seven years and six months’ jail on 18 November for his role in misappropriating more than 27,000 tonnes of gas oil worth around USD 12.8 million (SGD 17.2 million).

The third individual who was charged, Boo Pu Wen, reportedly passed away in July 2023 and had his charges abated following his death, meaning Boo’s court proceedings over his 19 charges at the time came to an end.

Former Shell employees, who were key members of a group who dishonestly misappropriated fuel from Shell Pulau Bukom, were sentenced to jail in court earlier.

Earlier coverage of developments by Manifold Times regarding the Shell MGO bunker heist can be found below:

Photo credit: Katrin Bolovtsova
Published: 2 December, 2024

Biofuel

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

Fingerprinting identifies feedstock origins of FAME-based biofuels used in shipping industry; can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity.

Published

8 hours ago

December 2, 2024

Admin

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

The Global Centre for Maritime Decarbonisation (GCMD) on Monday (2 December) released its latest report, presenting a new technique that creates a fingerprint for Fatty Acid Methyl Esters(FAME) bio bunker fuels.

This fingerprint identifies the feedstock origins of the FAME-based biofuels used in the shipping industry.

GCMD said FAME fingerprinting is needed as the shipping sector is increasingly using biofuels, such as FAME, to reduce its GHG emissions. With that, concerns have arisen regarding the legitimacy of biofuels and whether they are truly sustainable.

Industry bodies are seeing a rising number of cases mislabelling biofuels purported to be made from recycled oils and fats, while suspicions persist that they might be produced from cheaper and less sustainable virgin oils.

“To address these concerns, FAME fingerprinting can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity. By providing a physical validation method that complements existing certification schemes, FAME fingerprinting can help justify the green premium with genuine environmental benefits and safeguard the integrity of marine fuels supply chain,” GCMD said.

FAME fingerprinting is based on the principle that the fatty acid profile of FAME is unique to its feedstock and can be preserved during feedstock transesterification to produce FAME. The "fingerprint" can then be compared against a database of known fatty acid profiles to identify the feedstock origin.

GCMD worked with VPS who modified existing fuel testing methods to carry out sample analyses using a gas chromatograph with flame-ionisation detection, an instrument commonly found in fuel test laboratories.

The analysis takes about an hour, comparable to the turnaround time for current marine fuel quality testing in the supply chain.

“We have tested this method on a variety of FAME samples from different suppliers, including virgin oils, used cooking oils, palm oil mill effluent, beef tallow and food waste and were able to identify the feedstock origins for each sample,” GCMD added.

Manifold Times previously reported Captain Rahul Choudhuri, President, Strategic Partnerships at marine fuels testing company VPS, forecasting the use of finger printing technology today will likely establish a blueprint of how future alternative bunker fuels’ feedstocks are authenticated.

Captain Choudhuri said this when he gave an update of VPS’ biofuels finger printing trials with GCMD.

Note: The full report, titled ‘Rapid forensic analysis of FAME-based biofuels: Potential use of its fingerprint as a fraud detection tool’, can be downloaded here.

Related: Marine Fuels 360: Fingerprinting to play key role in proving biofuel feedstock authenticity and beyond, says VPS
Related: GCMD-led consortium completes trials of sustainable biofuel bunker supply chains
Related: Dr. Nicholas Clague shares VPS’ experience with alternative bunker fuels
Related: Dubai: Shipowners and peers discuss realities of biofuel adoption at VPS Biofuels Seminar
Related: Singapore: VPS panel discussion presents a masterclass in shipping’s biofuel bunker adoption issues to the deck

Photo credit: Global Centre for Maritime Decarbonisation
Published: 2 December, 2024

Methanol

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

Korean firm’s MoU with AE Risinājumi will see construction of Latvia’s first commercial-scale green methanol production plant, which will supply green methanol to ships in EU’s maritime fleet.

Published

8 hours ago

December 2, 2024

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PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

South Korean clean energy firm PLAGEN on Friday (29 November) signed an MOU with Latvian company, AE Risinājumi, for the production of green methanol in Latvia at the “2024 Latvia-Korea Business Forum” hosted by the President of Latvia.

The agreement will result in the construction of Latvia's first commercial-scale green methanol production plant, which will supply green methanol to ships in the EU's maritime fleet, contributing to the reduction of greenhouse gas emissions from maritime transportation.

PLAGEN's MoU aims to produce 20,000 metric tonnes (mt) of green methanol per year and will begin feasibility studies in the first half of 2025, and full-scale production will begin in 2028.

With 53% of Latvia's land area covered by forests, timber production and wood processing make a significant contribution to Latvia’s economic production, which generates a large amount of forest residues and wood wastes. In addition, Latvia also has an abundance and low price of renewable electricity from wind power.

Latvia is one of the most competitive countries in the European Union, as it can produce clean methanol at a competitive price by using abundant wood waste as a raw material and renewable electricity from cheap wind power.

The use of abundant forest residues and wood wastes as a feedstock and cheap renewable electricity from wind power makes it possible to produce green methanol with a competitive price, making Latvia is one of the most competitive countries in the EU.

In the European Union, the European Emissions Trading Scheme (EU-ETS) will come into effect in 2025, requiring shipping companies to purchase carbon credits for their greenhouse gas emissions.

In addition, the EU is implementing FuelEU Maritime, which aims to reduce greenhouse gas emissions by 2% below the 2020 average by 2025 and 80% by 2050. This is expected to result in an energy transition to green methanol.

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050, and plans to introduce full-scale regulations from 2027, and shipping companies have begun ordering methanol-powered ships fueled by green methanol, a carbon-neutral fuel.

“We expect to start producing green methanol in Latvia in 2028, which will reduce greenhouse gas emissions from EU maritime transport vessels and contribute significantly to the revitalization of the Latvian economy and national energy security,” said John Kyung, CEO of PLAGEN.

In November 2024, PLAGEN completed the purchase of an industrial complex and received a government permit for the construction of the country's first green methanol plant in Dongjeom Industrial Complex in Taebaek City, Gangwon-do.

The project, which will produce 10,000 mt per year, is scheduled to begin construction in the first half of 2025 and begin production in the second half of 2027.

Related: Korea: Taebaek City and PLAGEN to build green methanol bunker fuel plant
Related: Korean firm PLAGEN plans green methanol production project for bunkering

Photo credit: PLAGEN
Published: 2 December, 2024