Naval Damen builder, accused of bribery and money laundering in the Netherlands. The founder of the company and his son, the current president of the Board of Directors were charged

Dutch prosecutors announced on Friday that they had called the Naval builder Damen Shipyards, suspected of violating the sanctions of the European Union against Russia, and opened a separate file against the company and its directors for corruption, reports Reuters and NL Times.

The company denied both charges. Regarding the case related to sanctions, Damen said that “he always acted in accordance with the applicable sanctions” and that he is “surprised that a case of June 2022 is now sent to court”.

Regarding the accusations of corruption, Damen transmitted that he has “confidence in the judicial process and that he finally has the opportunity to explain that the suspicions of the Prosecutor's Office are unfounded.”

Prosecutors said in a statement that the investigation into the possible violation of the law of sanctions was led by the Dutch customs authorities and has been focused on goods and technologies that could have strengthened the Russian army, based on actions from 2022.

In October 2023, Damen sued the Dutch government, requesting damages for the losses suffered due to European sanctions against Russia.

Dutch prosecutors suspect important directors of Damen of bribery

In the corruption file, Damen and some of his directors will be prosecuted for alleged bribery, false and money laundering in relation to the sale of ships abroad, in a period between 2006 and January 2017.

The accused directors are the current chairman of the Board of Directors, Arnout Damen, his father, Kommer Damen, who founded the family business in 1967, and René B., who headed the Council between 2006 and 2019.

The decision to start the criminal prosecution comes after seven years of investigations and a failed attempt to settle the case outside the court, by a fine. Negotiations for the conclusion of an amicable agreement collapsed last year, after the Volkskrant newspaper revealed new bribe suspicions targeting the Dutch naval builder, and Nieuwsuur found that Damen bypass Russia.

The Public Ministry of the Netherlands suspects the company Damen and the three members of the Board of Directors that they would have paid too large amounts to the agents from abroad in charge of obtaining orders. For many years, Damen offered these agents a successful commission of 15% of the total order, which represents a huge amount, given the price of a ship.

Successful commissions so great increase the risk that agents will use some of the money for bribery. When Damen was forced to limit the commissions to 5%, the company and directors would hide additional amounts in accounting, according to prosecutors.

Damen company risks serious sanctions if found guilty

The consequences of criminal prosecution could be significant. Once convicted, a company is no longer allowed to participate in public auctions for four years, according to European public procurement regulations.

Damen is the most important naval builder for the Dutch navy.

In recent years, the Ministry of Defense in the Netherlands has ordered dozens of ships from Damen to replace the current fleet, justifying the choice of a Dutch naval builder as “in accordance with the governmental policy of consolidating the Dutch industry” and with the “strategic autonomy of Europe”.

In response to the questions in the Parliament, the Dutch State Secretary, Gijs Tuinman (BBB), said last month that “an ongoing criminal investigation and the suspicions of fraud and bribery are not mandatory reasons to exclude a company from an auction.” He did not mention the allegations related to the violation of sanctions.

Damen had two important naval sites in Romania, in Galați and Mangalia, but the second of them went into insolvency after years of misunderstandings with the Romanian state.