Sweden introduces sanctions fees

Sweden has updated its legislation and guidelines on the export of military equipment to introduce a system for administrative sanctions fees.

The amendments to the Military Equipment Act and the Regulation on Military Equipment came into force on 15 April. The Inspectorate of Strategic Products (‘ISP’) can now impose sanctions fees of between approximately €300 and €20,000 per violation, depending on the value of the business concerned.

Violations include non-compliance with rules over cooperation agreements, ownership in foreign legal entities, and notification of use of general authorisations. Government agencies, as well as private entities, can be found liable.

Although violations will not be subject to criminal penalties, companies may find their licence revoked or a prohibition imposed on using a general authorisation. Prior regulations apply to violations which occurred before the administrative sanctions fees came into force.

Liability for the sanctions fees is on the basis of strict responsibility: no intent or negligence is required. Mitigating circumstances in each individual case may result in the licensee being partly or wholly exempted from paying the fee, although if the violation is due to inadequate internal compliance procedures, lack of knowledge of regulations, or time shortages the fee is unlikely to be waived.