How do sanctioned goods get from the EU to Russia: a joint international investigation

15:56, 25.07.2024
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Sanctioned goods, critically important for Russia's military-industrial complex (MIC), continue to flow from Western countries to Russia. The sanctions-focused media project Trap Aggressor, along with German and French journalists from Süddeutsche Zeitung, NDR, WDR, and Le Monde, collaborated on an investigation to trace how this happens. 

It all started with the Russian company group “Promtech,” which actively collaborates with the Kremlin's MIC and continues to receive necessary equipment from Europe. For fulfilling defense contracts and producing electronic components and technologies for the aviation and electronics industries, 15 companies within the “Promtech” group are under U.S. sanctions. 

One of its enterprises, "Dubna Cable Plant" (DKZ), was a supplier to the Russian tank manufacturer "Uralvagonzavod," as evidenced by an invoice for nearly a kilometer of wires. Such goods, including crucial machinery for missile, aircraft, drone, and other weapon production, were imported by DKZ worth $3.2 million even in 2023. 

The purchases were made through the Turkish company Enütek, founded in 2022, whose only Russian clients are Promtech’s enterprises, including "Dubna Communication Equipment Plant," OKB "Aerospace Systems," "Promtech-Ulyanovsk," "Promtech-Irkutsk," "Promtech-Kazan," and "Kazan Synthetic Rubber Plant." According to Russian customs data, in 2023, the company exported goods worth $7.7 million to Russia. 

How can a Turkish company cooperate so easily with Russia? 

The Turkish company Enütek was founded by the French company Industrial Technologies Group France (ITGF). According to Russian customs data, ITGF actively supplied Western products to Russia until February 24, 2022, primarily to Promtech enterprises. Founded in 2015, the company was owned by JSC "Promtech" until May 2022, and its first general director was Alexey Shadrin, son of Valery Shadrin, the current head of Russian Promtech. Thus, Enütek restored ties with all former suppliers of “Promtech” after the sanctions were imposed. 

In the 12th sanctions package, in December 2023, the European Union significantly restricted the re-export of CNC machines and systems from third countries. Before this decision, companies exploited a loophole to supply critical products to Russia's MIC. 

"Such machines at the time of supply were not subject to export and re-export bans because the deliveries occurred before the 12th EU sanctions package. However, these machines potentially fall under EU export control as dual-use items, requiring a special permit or license for export," explained Olena Yurchenko, senior analyst at the Economic Security Council of Ukraine. 

The European Union is attempting to impact Russian MIC-related businesses through sanctions and criminal cases, but Western manufacturers can and should also halt supplies. During the Trap Aggressor investigation, it was found that Enütek ordered parts from a European company that previously supplied directly to Promtech, but the company continued processing the order. Western manufacturers must scrutinize their clients more carefully, especially those outside the EU, to prevent the re-export of sanctioned products to Russia.