Media expose scheme of import of sanctioned goods to Russia, in particular for military-industrial complex
The investigation of the Russian non-governmental project Verstka claims that almost all sanctioned goods worth hundreds of billions of dollars continue to enter the Russian Federation.
Source: Verstka; European Pravda
Details: The investigation is based on closed data from Russian customs and sources in logistics, freight forwarders, and businesspeople who know about the supply schemes for sanctioned goods.
Journalists found out that only in the first half of 2023, Russia had imported sanctioned microchips produced in the West with a total value of more than US$502 million. These components are used to produce missiles and other weapons.
They also delivered numerous pieces of equipment used by the Russian military-industrial complex, equipment for civil aviation worth at least US$171 million, and US$389 million worth of iPhones.
According to their conclusions, importing "anything from anywhere in the world, from dual-use microchips to a turbojet engine for an airbus" is now possible, and Western companies are involved in the schemes to circumvent sanctions through third countries.
According to the investigation, Russia still gets components such as Intel processors, Xilinx and Texas Instruments microchips, and the Analog Devices Inc. transceivers, which are used in the Kh-101 strategic cruise missiles.
"Over the past six months, the Russian authorities have cleared components from US-based Analog Devices Inc. worth more than US$98 million, more than US$75 million for Xilinx, more than US$42 million for Microchip Technology, at least US$38 million for Texas Instruments, and more than US$28 million worth for Infineon, Germany's largest semiconductor manufacturer," the investigation says, mentioning products from Marvell, Cypress Semiconductor, and Atmel.
Intel and AMD products, particularly microprocessors, were imported for more than US$169 million and US$35 million.
As noted, almost all Western electronics enter Russia through China and Hong Kong. The Top-3 largest senders of Intel components are called Time Art International (US$40 million), Union Tech Inc. (more than US$17 million), and Dexp International (almost US$15 million). Among the intermediary exporters, the Turkish company Margiana Insaat Diş Ticaret Limited Şirketi is also mentioned.
Dual-use chips are imported by hundreds of companies, and of the 25 largest importers 11 are direct suppliers of the Russian military-industrial complex. The investigation cites dozens of specific examples.
The Unimatik company allegedly brought Italian O.M.V machines to Russia, and German Arinstein for at least US$5 million. One of the leading state customers of Unimatik is Russian Plant No. 9, a leading tank gun manufacturer. A company from Hong Kong shipped the German machines.
In its simplest form, the import of sanctioned goods is organised through the registration in a company from a third country that will act as an exporter, and it buys off the necessary goods there or orders them directly from the manufacturer and re-exports them to the Russian Federation. They prefer to choose non-Russian citizens to register these intermediaries because suppliers pay attention to this. Most often, China or Türkiye is selected for registration.
Some cargo goes through the United Arab Emirates, Kazakhstan, Kyrgyzstan, Uzbekistan, and Armenia. The sources mentioned Georgia as a country where problems may arise with re-exporting sanctioned goods, but it was not indicated on the publication's infographic.
China is a key hub for re-exporting sanctioned goods to Russia.
The latest package of EU sanctions aimed to close loopholes in the already imposed sanctions against the Russian Federation and combat their circumvention through third countries.
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