Even though Russia invaded Ukraine almost a year ago, it is still getting technology from the West. Apparently, EU sanctions are being circumvented. According to Monitor research, third countries such as Turkey play a decisive role.
The company headquarters are inconspicuous. The Smart Impex company is located in the middle of a commercial area in Kerpen, near Cologne. However, the transactions carried out from here are explosive. Because from here, technology was sold to Moscow until shortly before the beginning of the war, which is obviously also of great importance for the Russian army: electronic components that are suitable for computers, for example, but apparently also for weapons used in the Ukraine war. The sale of these components is documented by customs data available to Monitor. What is striking here is that the Russian recipient company was co-founded by Jaroslaw Z., who is also a shareholder in the German company. Shortly before the start of the Russian war of aggression in Ukraine, direct sales to Russia were stopped. But new research from Monitor shows that these electronic parts were still sold through Turkey while the war was going on.
“They are the heart of Russian weapons”
According to experts, such electronic components played a crucial role in the war. They are also in rockets that are destroying homes, schools, and hospitals in Ukraine. “They are at the heart of Russian weapons,” says James Byrne of the British think tank RUSI, which specializes in defense and security. RUSI employees kept finding western components in the rubble on site in the Ukraine. The components delivered by Kerpen could also have been used in this way. However, the company stopped selling to Moscow after the beginning of the war. After February 24, 2022, the customs data for goods sent to the Russian company Fast Impex won’t include sales from Germany. Instead of the German Smart Impex, a Turkish company suddenly appears in the import lists, founded a few weeks after the beginning of the war in Istanbul, AZU International. Co-founder: Göktürk A., who is also the managing director and shareholder of the former German supplier Smart Impex. Last year, the Turkish company sold exactly those components to Moscow for more than 20 million dollars that had previously been obtained from Germany.
Systematic circumvention of sanctions?
A construct for circumventing sanctions? It looks like the German company is not an outlier. After the Russian war of aggression began, Turkey’s exports in the field of “semiconductors and electronic circuits” almost exploded, going from around $300,000 in 2021 to more than $86 million in 2022. “We are seeing a massive increase in exports of these components from Turkey to Russia, mostly by companies that have never traded in these types of components,” says economist Elina Ribakova, who has been involved in a detailed analysis of Russian imports. For them, this is proof of a possible systematic circumvention of EU sanctions. Does the German company Smart Impex also continue to sell electronic components to Moscow—via the detour of founding a new company in Istanbul? Two months ago, the Reuters news agency reached Göktürk A., shareholder at the German Smart Impex and co-founder of the Turkish AZU International. He admitted on the phone that the company from Kerpen sells electronic components to Turkey and that everything else is a “company secret.”
Expert sees a need for investigation
The sanctions law expert Bärbel Sachs sees a need for investigation in view of the company construct: “If the German managing director now carries out transactions from Turkey that would be banned from Germany, then that is also a violation of the embargo, namely against the bans and also against the bans on brokerage.” Monitor now has further documents that obviously confirm this triangular trade: The German company’s managing director resigned because he felt duped: “that deliveries from Smart Impex GmbH to the company AZU were made knowing that deliveries from AZU would be made to Russia and Belarus.” In other words, because the company near Cologne continued to sell the components via Istanbul to Russia. During the research, Monitor tried various ways to reach the companies in Turkey, Russia, and Germany. On site in Kerpen, nobody opened the door, although several cars were parked in front of it. In response to a written request, Smart Impex writes: “We are currently having the allegations […] examined very carefully. The previous examinations show that the goods we sold were or are not sanctioned,” to blur the business construct. In the past few weeks, shares have been sold, a company name has changed, and shareholder structures in Turkey and Russia have changed. These are indications that the company may well be in violation of European sanctions. The Cologne public prosecutor’s office, which did not give any information about ongoing investigations when asked, would have to decide if there was a violation of a sanction in this particular case.