Sep

30

Dutch Export Defendant Flies to U.S. to Face Charges


Posted by Clif Burns at 4:50 pm on September 30, 2009
Category: Criminal PenaltiesIran Sanctions

Rob KraaipoelBack in 2007, I discussed in two posts (here and here) a criminal complaint filed against Netherlands-based Aviation Services International, B.V., and its owner Rob Kraaipoel, a citizen and resident of the Netherlands. The criminal complaint accused Kraaipoel and his company of exporting U.S.-origin items from the Netherlands to Iran without required U.S. licenses. Given the absence of any contacts by Aviation Services and Kraaipoel with the United States, I stated that the U.S.-origin of the goods was not a sufficient basis for criminal jurisdiction over the two Dutch entities and that an extradition request might not be viewed favorably by Dutch courts. A temporary denial order was later put in place by the Bureau of Industry and Security (“BIS”) against Kraaipoel and his company. That order forbade U.S. entities from exporting any items to Kraaipoel or Aviation Services or participating in any exports to them. And that, I thought, would be the end of the matter.

So I was more than a little surprised to read that Kraaipoel appeared last week before a federal judge here in D.C. entering a plea of guilty, both individually and on behalf of Aviation Services, to charges arising from his exports of U.S.-origin goods from the Netherlands to Iran. Had he foolishly planned a vacation to Disneyland and gotten nabbed at an airport in the United States? Had a Dutch judge actually granted a motion for extradition in this matter? No, according to the government’s motion to quash an arrest warrant issued against Kraaipoel in 2007, Kraaipoel had retained U.S. counsel and had voluntarily agreed to fly to the United States to face the music.

Why on earth would he do that? The plea agreement, after the agreed downward adjustments from the Federal Sentencing Guidelines, calls for a penalty of 46 to 57 months in jail. Of course, we can only speculate here, but it seems that several factors might be in play. Even if a Dutch court was unlikely to entertain an extradition motion, law enforcement authorities in other jurisdictions might enforce the warrant at the request of the United States. Think Roman Polanski. This has been done in at least one export case where a U.K. resident was arrested by Polish authorities based on a U.S. arrest warrant. The BIS denial order would also have probably been hurting Kraaipoel’s business, but the last temporary denial order expired in April 2009, and Kraaipoel and his company are not currently on the Denied Parties List. Even if more TDOs are imposed, nothing in a guilty plea would motivate BIS to lift a denial order but rather would serve more as a basis to extend any existing denial order.

Oddly Kraaipoel was allowed to return to the Netherlands after entering his plea and no date for sentencing was set. An AP report quoted Kraaipoel’s attorney as saying that the defendants were hoping for a sentence of probation only in light of anticipated cooperation with prosecutors. The plea agreement indeed provides that Kraaipoel would be released pending sentencing in light of his anticipated cooperation in further investigations. And it further states provides that in the event that Kraaipoel provides “substantial assistance,” the government would move that the defendant be allowed to argue for a sentence with a lesser period of incarceration. The proffer of proof indicates that Kraaipoel was acting in concert with Iranian individuals operating in Cyprus and the U.A.E. Sounds like they might be the next targets of this investigation.

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One Comment:


Cooperation with BIS and OFAC by any EU government or person arguably would have violated EU Regulation 96/2271, the annex of which specifically names both the Cuban regs and ILSA, which ratified and retained the then existing ITR as well as theoretically imposed additional extraterritorial sanctions on foreign firms that invest more than $20 million in the Iranian petroleum industry. I have an opinion from UK and Netherlands counsel, circa 2006, to the effect that EU residents, individuals and companies, that are targets of US enforcement actions arising out of the ITR may invoke the provisions of 96/2271 against cooperation by governments (e.g., customs) and private individuals and companies that might want to cooperate with US enforcement (think witnesses and/or provision of documents). That all requires money for legal fees, of course, which can be even higher in Europe than the good folks on Wall Street or K Street charge.

Comment by Hillbilly on October 1st, 2009 @ 8:28 am