During 2024, more than 300 Russian intermediary companies imported sub-sanctioned products into Russia for a total of $22 billion, of which about $1 billion were supplies to Russian military-industrial complex enterprises, according to The Insider’s investigation.
Among the products they purchased are equipment and components for the production of drones, microchips and sensors for military equipment, radio parts, batteries made in Japan, Taiwan, South Korea, Germany, Switzerland and other countries.
Roman Dobrokhotov, editor-in-chief of The Insider, called the publication one of the most important investigations in recent years. We have found a way to identify supply chains from border crossings to a specific military plant en masse, by the hundreds. This changes things dramatically, because it will allow all known suppliers to be sent under sanctions en masse, rather than two or three at a time as before. Under such conditions, it will be very difficult for the military-industrial complex to adjust and this may finally become a real problem for Russian military production,” he wrote in social network X.
The importing companies trading with the Russian MIC in 2024 are divided into four groups.
The first includes military production, which buy sanctioned goods directly, without intermediaries – these are old military plants, fully or partially owned by the state, among which, for example, United Engine Corporation, Ural Optical and Mechanical Plant, Kazan Helicopter Plant. They conduct foreign economic activities in exceptional cases.
The second group consists of industrial giants producing large-tonnage products (steel, pig iron, aluminium, petroleum products). The military-industrial complex cannot exist without their products, and they cannot exist without the military-industrial complex, the investigation says. Most of them are not under sanctions despite regular supplies for the MIC.
The third group is related companies that produce separate units and components for Russia’s military that use Western components. The Insider calls them the most interesting group of private importers doing business with Russia’s military-industrial complex: if they fall under sanctions, they will have to find intermediaries to trade with the West, which will make their activities much more complicated.
The fourth and most numerous group includes resellers. As the journalists point out, those companies whose import turnover roughly coincides with the turnover from operations with the military-industrial complex are particularly interesting in terms of the imposition of sanctions. Medium and small in terms of the volume of transactions with the military-industrial complex, resellers are now not under Western sanctions at all, notes The Insider.
After Russia launched a full-scale invasion of Ukraine, the U.S. and other Western countries imposed a series of sanctions against Russia aimed at reducing Moscow’s ability to wage war by cutting off access to Western technology. However, Russia continues to find ways to circumvent the sanctions and manages to obtain foreign components.