Finland Releases Bulker with Fertilizer Linked to Sanctioned Oligarch

Finnish officials relented yesterday and granted an export permit after detaining a Cyprus-flagged bulker while they sought to determine the origins of its cargo and if it violated EU sanctions. Reports in the Scandinavian media outlet Svenska Yle said that the cargo of fertilizer was likely linked to one of the Russian oligarchs listed by the EU as punishment after the invasion of Ukraine.

The vessel, the Smew is managed by Canfornav (Canadian Forest Navigation Co.) with the Equasis database listing the owners as Lucie Navigation of Cyprus. Built in 2014, the nine-year-old vessel is 590 feet long and 35,998 dwt. Canfornav reports on its website that the company’s business has expanded over the years from its forestry origins to global trade carrying approximately eight million tons of cargo (grain, agricultural products, fertilizers, steel, concentrates, and more) and performing around 350 voyages annually.

The Smew arrived at the beginning of March in the northern Finnish port of Hamina-Kotkan, which handles containers, liquid and dry bulk, gas, RoRo cargo, and project shipments. Being the biggest universal port in Finland, Hamina-Kotka both serves the Finnish exporting industries, transit traffic, and major international projects and plays a vital role because of its location less than 50 miles from the Russian border.

The National Enforcement Authority for Finland imposed an interim measure on March 9 to freeze the shipment of fertilizer being loaded to the bulker. According to the Ministry of Foreign Affairs, the fertilizer was suspected of being under the control of a person listed in the EU sanctions. Under the EU rules, member states must freeze the funds and economic resources owned or controlled by sanctioned individuals. 

In its report, Yle said that the vessel was loaded with 20,000 tons of fertilizer in Kota. Estimates put the value of the cargo at between €10 and 12 million. The declared destination is the port of Acajutla in El Salvador.

The ministry did not identify which oligarch was thought to be behind the shipment with the media reports noting that several of the Russians are involved in the fertilizer export business. The report contends that the Russians are using shell companies to avoid the sanctions with the media noting that last year Finland confiscated the proceeds of another transaction with that case awaiting a decision from the Helsinki Court of Appeals.

The CEO of the Finnish port, Kimmo Naski, told Yle that the Smew is the first case where EU sanctions have stopped cargo at the port.

Finland’s Ministry of Foreign Affairs reports it received a request on March 19 for authorization for the export from the purchase of the fertilizer and three days later on March 22 they gave conditional permission for the shipment.

“The authorization is granted under the condition that the fertilizers are exported to a third country to promote food security. The Ministry has endeavored to ensure that this condition is met by including in its authorization special conditions that relate to the confirmation of the fertilizer’s destination,” they wrote announcing the decision to release the vessel and its cargo.

The Ministry for Foreign Affairs estimates that the ship loaded with the fertilizers may leave the Port of Kotka within the next few days and no later than within a week. The time of departure depends on the purchaser of the fertilizers performing the measures required in the authorization.