When Economic Sanctions Cause White-Collar and Corporate Crime: The Case of Hidden Russian Ownership Revealed by a Norwegian Insurance Firm

Abstract

Sanctions have criminalizing consequences. This paper addresses the issue of Russian businesses attempting to circumvent and evade sanctions by white-collar and corporate crime. The case presented in this paper concerns a Norwegian smolt production facility owned by Russians, who suddenly transferred ownership to a Norwegian because of the sanctions. It seemed that the Russians remained the real owners since the Norwegian paid nothing for the shares. While Norwegian police were reluctant to investigate the matter, a Norwegian insurance firm became worried that insurance premiums paid by the production facility in Norway could represent money laundering. This paper presents the case of potential money laundering by review of the literature on sanctions and by application of institutional theory. The fact that economic sanctions are problematic in themselves and in addition stimulate white-collar and corporate crime and even mafia business as exemplified in Iran, should be an important consideration against the trend of imposing sanctions on steadily more countries that are different from our countries.