The European Public Prosecutor’s Office (EPPO) has opened an investigation into a company accused of obtaining EU subsidies fraudulently, while allegedly also supplying technology to the Russian and Belarusian military industries.
The EPPO announced on December 22 that three individuals have been detained in connection with the investigation.
The company participated in an EU-funded project to develop high-accuracy Global Navigation Satellite System (GNSS) receivers for use in precision agriculture, said prosecutors.
The technology was funded through the EU Agency for the Space Programme (EUSPA), and provides accurate positioning for farm machinery and field operations. It allows precise guidance and mapping without requiring local infrastructure to correct the satellite information.
The total budget of the project is €1.06 million, of which €745,000 is funded by the European Union agency. So far, the company had already received €447,000 of that funding.
The EPPO suspects that the firm concealed its true ownership and control in order to qualify for EU funding, despite the EU’s sanctions against Belarus and Russia.
According to EPPO, the company changed ownership in April 2022, shortly after the Russian invasion of Ukraine, from a Belarusian citizen to one of the latter’s family members, who had US-Belarusian double citizenship.
“This was possibly done to create the appearance that the company is not managed by Belarusian citizens,” notes the EU prosecutor.
Belarus and Russia are both subject to EU sanctions. In the case of Belarus, EU law prohibits selling, supplying, transferring or exporting goods or technology to Belarus, to any person or entity based there, or for use within the country.
The investigation raises questions over how rigorously EU agencies screen recipients of their funding, especially for projects with dual-use or security-sensitive applications.
A study from Yale University has revealed many EU companies are still doing business in Russia, which includes a number of highly prominent firms from France, Italy, Germany, and the Netherlands.
