Confiscation of profits due to breach of UN embargo

Date 4 sep. 2012
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In the case against Danish motor company Bukkehave Corporation A/S, the Supreme Court found that the company was in breach of the UN embargo and that DKK 10m would be confiscated from the company.


Bukkehave was found to have breached the embargo rules under the UN “Oil-for-food” programme, because it had made agreements regarding the delivery of trucks to Iraq on terms at excess prices where the excess price was passed on to the Iraqi authorities during the period 2000-2001.


In doing so, the company was acting against the law, as the payment of the agreements derived from an UN account containing means originating from Iraqi sale of oil, and said means were meant solely for the purchase of food, medicine and other necessities.


The Supreme Court stated that the purpose of the confiscation of profits was to remove the enrichment that had been obtained from the breach. The confiscation was set at DKK 10m which amounted to the estimated profits made from the agreements, however, excluding the excess price, but with an estimated addition of interest. The excess price was not confiscated seeing as the agreement between Bukkehave and Iraq implied that the excess price could not be seen as profits accrued to Bukkehave. The Supreme Court further found that Bukkehave’s expenses to a local agent and partial expenses to an office in Jordan could be deducted when calculating the profits.


The High Court had reached the same result, while the City Court originally had set the confiscation amount at DKK 25m because it had found that the breach was intentional.

 

 

If you have any questions or require additional information, please contact Partner Nicolai Hesgaard (nhe@mwblaw.dk).


The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.