A Dutch firm assigned to a “significant contract” to produce “vital” tug boats for Portsmouth have been accused of “breaching Russian sanctions”, a national report said.

As reported in The Times, Damen Shipyards is facing prosecution with legal proceedings against the firm starting in April. They are the subcontractor for Serco Maritime and in charge of producing 24 vessels as part of a mammoth £850m ten-year contract.

New pilot and tug boats are being constructed for Portsmouth Naval Base, with the new vessels being used to conduct maritime services for the Royal Navy. Controversy has arose, with Damen Shipyard in The Netherlands being accused of breaching Russian sanctions. | Damen Shipyards

placeholder image — New pilot and tug boats are being constructed for Portsmouth Naval Base, with the new vessels being used to conduct maritime services for the Royal Navy. Controversy has arose, with Damen Shipyard in The Netherlands being accused of breaching Russian sanctions. | Damen Shipyards

Sales manager for UK and Ireland Frederik van der Linde said the firm was delighted to be awarded the “significant contract” to produce vessels for HMNB Portsmouth, Devonport, and Faslane in Scotland. Various tug and pilot boats and barges are being built to support the Royal Navy with all towage activities.

Other afloat services are being bolstered by the deal, including bunkering and watering, tank cleaning, passenger services, trials work, munitions and nuclear safety activities. These ensure the continued operation of all shipping movements, while making sure major Royal Navy deployments from HMNB Portsmouth can be carried out.

The Times reports the contract between Serco and Damen is worth around £200m of cash from the British taxpayer. The Netherlands Public Prosecution Service is prosecuting the firm and specific former directors following an eight year bribery investigation. It accused Damen of violating sanctions imposed in response to Russia’s illegal invasion of Ukraine.

Dutch prosecutors said this relates to “goods and technology that could contribute to the military and technological strengthening of Russia”, during the second half of 2022. Damen denies the set of allegations and said it has “robust compliance organisation”, which meets “the highest standard for anti-corruption measures”.

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It added that the case relates to the one-off supply of civilian cranes in 2022 and that this “took place within the sanctions legislation in force at the time”, and that independent sanctions experts determined the single delivery was “permissible under the sanction’s regime”.

An Ministry of Defence (MoD) spokesperson told the national publication that it would not contract any company convicted of Russian sanction violations. They added that they are holding discussions with Serco, with the contract being signed before Dutch legal action was made public. “If a conviction is upheld by the Dutch authorities, we will take immediate and decisive action,” they said.

Serco said: “Serco and the MoD have been working with Damen to provide support services for the Royal Navy for over 20 years and they are a trusted partner.”