Danish industrial giant FLSmidth is under criminal investigation for possible breaches of EU sanctions on Russia, joining a record number of Danish companies now facing scrutiny over exports and business ties since the 2022 invasion of Ukraine.
The Danish Special Crime Unit is probing FLSmidth over potential violations tied to cement industry equipment shipped to Russia after the full scale war began. The company’s CEO has stated publicly that management takes the case very seriously and is cooperating with authorities, as reported by DR. No charges have been filed yet. Details about specific transactions, values or counterparties remain undisclosed while the investigation continues.
This is not an isolated case. Since February 2022, Danish authorities have opened 91 criminal investigations under Penal Code section 110 c for possible sanctions breaches, with about 40 still active. The Danish Business Authority has completed 144 administrative reviews of potential Russia sanctions violations and referred eight to police. Another 45 cases are under current review.
A Structural Shift in Enforcement
I have watched this shift unfold over the past three years. Denmark, like much of Europe, historically treated sanctions enforcement as a box ticking exercise. That changed when Russian tanks rolled into Ukraine. The surge in cases reflects not just more violations but a political mandate from Brussels for member states to move beyond paper sanctions to visible, credible enforcement.
For companies like FLSmidth, which sells advanced industrial equipment worldwide, the challenge is real. The EU has adopted 14 sanctions packages and six regulation packages since February 2022. These target finance, energy, high tech goods and dual use technology. Cement equipment is not banned per se, but components with potential military or infrastructure applications can fall under export controls.
The rapidly expanding lists and frequent amendments make compliance difficult. When you operate via subsidiaries or distributors in third countries, tracking end use becomes even harder. This complexity will be central to the FLSmidth investigation: did specific deliveries violate EU measures in force at the time, and did the company know or should it reasonably have known about end user links to sanctioned actors?
Lessons from Dan Bunkering
Danish courts have already shown they will convict large companies and top management for sanctions breaches. In 2021, Odense City Court found A/S Dan Bunkering Ltd. and parent company Bunker Holding guilty of selling 172,000 tonnes of jet fuel worth DKK 639 million that ended up in Syria. Dan Bunkering was fined DKK 30 million, Bunker Holding DKK 4 million. The CEO received a four month suspended prison sentence. Authorities confiscated DKK 15.6 million in profits.
The court emphasized that the companies had reason to suspect the end use of the fuel but failed to act adequately. That case has become a wake up call for Danish exporters. Penal Code section 110 c, the same provision at issue in the FLSmidth probe, carries penalties up to four years imprisonment for serious violations. The legal threshold is negligence, not just intent.
For FLSmidth’s management, the Dan Bunkering precedent underscores the personal and financial risks if authorities can document inadequate due diligence or turning a blind eye to red flags.
Why Physical Goods Are Harder to Police
Sanctions expert Peter Meedom argues in Ræson that Western sanctions have not stopped Russia’s war effort, partly because physical goods can be rerouted via third countries. Banks have invested heavily in know your customer systems and sanctions screening, leading to detection of suspect transactions. Export of machinery, electronics and industrial equipment is far harder to track, especially when companies rely on distributors or complex supply chains.
This is the enforcement gap authorities are now trying to close. In late 2023, the G7 sanctioned more than 130 entities in China, Turkey, the UAE, Ireland, Switzerland and Latvia for supporting Russia’s military industrial complex. The message to multinational exporters is clear: you cannot simply rely on your customer’s word. You must scrutinize intermediaries, particularly in high risk jurisdictions.
A Boardroom Issue, Not Just a Legal Technicality
A 2024 report from Copenhagen Business School on societal compliance highlights that sanctions enforcement depends on high quality ownership registers, information sharing and specialized skills in both authorities and private firms. The authors argue that sanctions risk has become a strategic governance issue for boards and top management, on par with corruption or money laundering scandals.
FLSmidth’s public statement that it takes the case seriously fits this trend. The company says it has a global compliance program and has been phasing out Russian business since 2022. But the investigation will test whether that program was adequate at the time of the deliveries in question.
Even absent a conviction, the reputational damage can be significant. Global clients and financial institutions increasingly apply their own compliance policies that go beyond minimum legal requirements. A public investigation can trigger pauses in tenders, stricter contractual clauses or tougher financing terms. For a listed company dependent on international customers and investors sensitive to ESG issues, the stakes are high.
The Expat Reality Check
Living in Denmark, I have seen how seriously the public takes the war in Ukraine. Support for sanctions is strong, and there is little patience for companies that prioritize profits over compliance. At the same time, business groups warn that the complexity and pace of EU rule changes create legal uncertainty. The debate often surfaces when cases like FLSmidth’s emerge: is this deliberate circumvention or good
