In a judgment from August 23, the Supreme Court approved the confiscation by the Public Prosecutor for Serious Economic Crime of DKK 10 million from a company having violated the trade embargo against Iraq.

The case is caused by a number of companies violating the trade embargo adopted by the UN Security Council after Iraq's invasion of Kuwait. To protect the civil population of Iraq, the country was, as an exemption from the embargo, permitted to buy certain goods in other countries in a special system controlled by the UN (the so-called "Oil for Food"-programme), but a number of Danish companies circumvented the system, thereby violating the trade embargo.

After discussions with the Public Prosecutor for Serious Economic Crime, 13 of the companies chose more or less voluntarily to accept confiscation according to a settlement of several millions by way of the proceeds the companies had gained by trading with Iraq. However, one company did not wish to accept the confiscation, among other things, because they did not believe that they had gained any (net) proceeds.

The provisions of the Criminal Code on confiscation

The important question during the proceedings was how the provisions of the Criminal Code on confiscation are to be construed. According to the provisions, the proceeds gained from any criminal act may be confiscated. However, it is not always easy to determine whether and how large proceeds have been gained, and during the proceedings there was disagreement as to how commission to a local agent and expenses for establishing and running an operating office in Jordan were to be included in the "accounts".

The City Court had concluded that an amount of DKK 25 million was to be confiscated. The Eastern High Court did not agree and reduced the amount to DKK 10 million. Three of the Supreme Court judges agreed with the High Court, while two judges arrived at an amount of DKK 20 million.

Should the settlements be reopened?

Following the High Court judgment, there are speculations as to whether all or some of the settlements made between the Public Prosecutor for Serious Economic Crime and the 13 companies are to be reopened as they seem to have been made on the basis of wrong assumptions.

Attorney, Jakob S. Arrevad, Horten, who assisted one of the companies in the negotiations with the Public Prosecutor for Serious Economic Crime, has stated to the newspaper, Børsen:

"The judgment may give rise to considerations as to whether the settlements were made on the basis of wrong assumptions. The prosecution service ought to look into whether they have claimed too large amounts from the companies. If the prosecution service keeps the money, then they have received some money that they ought not to have obtained." Jakob S. Arrevad thus encourages the companies having made settlements to claim their money back.

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Jakob S. Arrevad

Attorney