When economic sanctions are imposed, the expectation is that companies within sanctioning nations will sever business ties with the targeted country. Yet, the reality is often more complicated. This paper examines a Norwegian seafood company allegedly circumventing sanctions against Russia, using concealed ownership structures to maintain business operations. At the center of the case is Arne Geirulv, a Norwegian businessman accused of fronting for Russian interests to retain control over fish hatcheries in Norway – an industry of importance to Russia’s aquaculture sector.
To understand why firms engage in sanction evasion, the authors apply a framework based on three key factors: motive, opportunity, and willingness. The primary motive is often financial survival. For companies facing severe economic losses due to sanctions, the choice to comply might mean business failure. In this case, Geirulv’s alleged involvement is interpreted as an attempt to prevent financial ruin, rationalizing non-compliance as a necessity rather than an outright violation.
The second element, opportunity, emerges when regulatory loopholes or weak enforcement create an environment where sanctions can be circumvented with relative ease. The paper argues that gaps in Norway’s enforcement mechanisms, particularly concerning beneficial ownership laws, provided an avenue for maintaining Russian control over the company while presenting a Norwegian front. Legal ambiguities and weak oversight made it possible for ownership structures to be reconfigured without triggering immediate legal consequences.
The final component, willingness, highlights how firms justify their actions. Those engaging in sanction evasion often do not view their conduct as unethical but rather as a pragmatic response to an external threat. The authors suggest that in cases like this, individuals frame their actions as a necessary adaptation rather than outright defiance, particularly in the absence of direct enforcement.
The study highlights the challenges of enforcing economic sanctions. While they are designed to exert financial pressure on targeted states, their effectiveness is often undermined by strategic adaptation, legal complexities, and economic incentives for non-compliance. The case of the Norwegian seafood company serves as an example of how firms navigate these constraints, revealing implications for sanction enforcement and the unintended consequences of economic restrictions.
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