EPPO: Belarusian EU Sanctions Fraud Conviction for Subsidy Scheme

• A Belarusian father, son, and their company were convicted of subsidy fraud by the EPPO in Vilnius, Lithuania, on August 31, 2026.
• The Lithuanian company fraudulently obtained €447,272 in EU funding from EUSPA for satellite navigation technology by concealing strong links to Russian and Belarusian military industries.
• Defendants attempted to circumvent EU restrictions on Belarusian nationals through an ownership change but maintained effective control and held leadership roles in other sanctioned military-linked entities.
• They pleaded guilty, compensated the EU for the full disbursed amount, and received fines totaling €2,100 for the son, €22,700 for the father, and €24,000 for the company after reductions and custody credits.

This conviction sends a clear message regarding the severe consequences for those attempting to defraud EU institutions and bypass restrictive measures, particularly when linked to the Russian military or Belarusian military industries.

On August 31, 2026, the European Public Prosecutor's Office (EPPO) announced the conviction of two Belarusian citizens, a father and son, along with a company they controlled, for subsidy fraud. The case, investigated by the EPPO's Vilnius office under the codename 'Precision', centered on a Lithuanian-based company that secured significant European Union funding for a project to develop advanced satellite navigation technology. This conviction highlights the EPPO's aggressive enforcement against EU sanctions circumvention, particularly concerning hidden ties to sanctioned military industries.

The company had obtained EU funding to create high-precision satellite navigation devices intended for the agricultural sector. These devices were designed to utilize Galileo’s High Accuracy Service (HAS) to guide agricultural machinery and support precision farming operations. However, the EPPO investigation uncovered strong, undisclosed links between the defendants and military industries in both Russia and Belarus, entities explicitly targeted by EU restrictive measures.

To secure the EU funding, which totaled €745,453.67 from the European Union Agency for the Space Programme (EUSPA) out of a project budget of €1,064,933.81, the company was required to submit a declaration of honour. This declaration falsely asserted that the company was not subject to any EU restrictive measures and had no connections to sanctioned entities. In reality, €447,272 had already been disbursed based on these fraudulent representations.

Further investigation revealed a deliberate attempt to evade EU restrictions applicable to Belarusian nationals. Shortly after Russia's aggression against Ukraine, in April 2022, the company's ownership was formally transferred. A family member holding US citizenship and a Lithuanian national were appointed to leadership roles, ostensibly to distance the company from its Belarusian controllers. Despite this change, the Belarusian father and son maintained effective control over the Lithuanian entity. The EPPO also discovered that these individuals held prominent positions in a Russian-based company that develops and tests satellite navigation chips for military applications, an entity itself subject to EU sanctions. One of the defendants even acquired Russian citizenship between 2020 and 2021, reportedly for personal gain. He also possessed substantial shareholdings in other companies directly or indirectly linked to military programs and cooperating with the military industries of the Russian Federation and the Republic of Belarus, many of which are also under EU restrictive measures. In one Russian company, he held a majority stake, while a former high-ranking Russian state security officer held a significant share. By concealing these critical connections, the defendants not only obtained EU funding but also gained illicit access to the EU market and sensitive geospatial data.

The EPPO's diligent work led to the defendants pleading guilty to the charges. As part of their admission, they fully compensated the EU for the damages incurred, repaying the entire €447,272 that had been disbursed. The Vilnius District Court subsequently convicted them of subsidy fraud, committed jointly with others, as well as forgery and the use of forged documents.

Under a simplified procedure, as permitted by the Criminal Code of the Republic of Lithuania, the fines imposed were reduced by one third. The son received a fine of €36,000, which was then offset by 73 days spent in custody, credited at a rate of €300 per day, resulting in a final payment of €2,100. The father was fined €34,500, also reduced by one third, and had one day of custody credited at €300, leaving a final amount payable of €22,700. The company itself was fined €36,000, reduced by one third, resulting in a final payment of €24,000. This outcome underscores the European Public Prosecutor's Office enforcement capabilities in combating financial crimes that undermine EU interests.

European Chief Prosecutor Laura Kövesi emphasized that the 'Precision' case exemplifies the EPPO's swiftness and effectiveness in addressing instances of EU sanctions circumvention. She noted the investigation moved from initiation to conviction in approximately one year, highlighting the agency's operational efficiency. This case serves as a critical reminder of a highly sensitive EU policy area where robust due diligence and preventive measures are paramount.

This conviction sends a clear message regarding the severe consequences for those attempting to defraud EU institutions and bypass restrictive measures, particularly when linked to the Russian military or Belarusian military industries. It reinforces the need for rigorous scrutiny of beneficial ownership and supply chains, especially for entities seeking EUSPA funding or operating in jurisdictions with high sanctions evasion risks, further demonstrating the impact of EPPO subsidy fraud Russian military investigations and Lithuania sanctions evasion conviction efforts.

This case underscores the EPPO's aggressive enforcement of EU sanctions and anti-fraud measures, particularly concerning hidden links to sanctioned military industries. Lawyers and compliance officers must enhance due diligence protocols for beneficial ownership and supply chains, especially for entities seeking EU funding or operating in high-risk jurisdictions, to mitigate severe fraud and sanctions circumvention risks.

Source: Original reporting via European Public Prosecutor's Office.