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An art gallery where Princess Eugenie is a director has been cleared of breaching Russian sanctions following the sale of a painting.
Hauser & Wirth and shipping company Artay Rauchwerger Solomons faced charges after they sold a piece of art to a man named Alexander Popov.
The painting, known as Escape from Humanity by American artist George Condo, was made available to the art dealer sometime between April 14 and December 31 2022.
Prosecutors alleged Mr Popov was a resident of Russia and claimed the art deal had breached sanctions imposed by the UK government over the transfer of luxury goods.
The gallery, which has a showroom on Savile Row and locations in New York and Paris, applied with the shipping company for the charges to be dismissed.
Today, Judge Tony Baumgardner quashed the two criminal charges, ruling that prosecutors had not produced sufficient evidence that Mr Popov was a Russian resident at the time of the art deal.
The judge's ruling brings to an end the prosecution, stemming from an HM Revenue and Customs investigation, which was believed to be the first of its kind involving allegations of luxury goods being made available to Russians.
The regulation was introduced in April 2022 when supplying, delivering, or 'making available' luxury goods to, or for use in, Russia was made an offence.
Princess Eugenie pictured on the Hauser & Wirth stand at a Paris art festival in 2022
Pictured: Alexander Popov who bought a painting from Hauser & Wirth in 2022
This included everything ranging from luxury cars and caviar through to sports equipment, musical instruments and art.
Companies convicted of breaching the regulations can face an unlimited fine.
Princess Eugenie was not accused of any wrongdoing in the criminal case.
In its application to dismiss the charges, which was heard in early May, Hauser & Wirth's barrister Hugo Keith KC suggested the case may never have been brought at all if delivery company DHL had not wrongly put down a Moscow address instead of Armenia.
He pointed out that Mr Popov, who has never been individually sanctioned, had rented out his Moscow flat, distanced himself from Russia and President Vladimir Putin's regime, and was moving his 'life's work' from the country.
Speaking at Southwark Crown Court, Prosecutor Kevin Dent KC argued that in early 2022 Mr Popov and his wife were described as 'young and dynamic collectors based in Russia' who had a foundation at the heart of Moscow.
'He's a Russian citizen, owned Russian property, had businesses in Russia, had a foundation in Russia,' he suggested.
But Mr Keith put forward evidence that Mr Popov had renounced his Russian citizenship and obtained properties in Bosnia and Armenia.
Hauser & Wirth, along with an art transport firm, is accused of making available the painting Escape from Humanity by American artist George Condo to a person connected with Russia
Delivering his ruling, Judge Baumgardner accepted that Mr Popov had been distancing himself from Russia.
He concluded: 'Although the artwork was made available to Mr Popov, I have found the prosecution couldn't prove he was a person connected with Russia.
'That failure is fatal to all counts.'
The judge quashed a charge against each defendant of making available a luxury good to a person connected with Russia.
The UK’s department for international trade had imposed a ban on the export of luxury goods worth more than £250 to Russia in April 2022 following Russia’s invasion of Ukraine.
Artay Rauchwerger Solomons, formerly known as Art Logistics Limited, was placed in voluntary liquidation last year.