Leaked secret documents from Russian companies have revealed how they import Western advanced electronics, circumventing sanctions. Notably, the components produced by Keysight Technologies, an American corporation, and MPI Corporation, a Taiwanese company, are available to Russian importers.
According to the documents, Russian firms involved in supplying the Russian defense ministry’s orders have signed contracts for deliveries of electronics and other parts produced by Keysight Technologies.
Radioline signed a deal to deliver to Spetsialnyi Tekhnologicheskiy Tsentr Keysight devices and components
The Russian firm “Radioline” was expected to perform these shipments. It is unclear whether Keysight Technologies was aware that its production ended up in the hands of manufacturers connected to Russia’s war machine.
Ukrainian hackers have published correspondence from Russian companies involved in the production of equipment for the Russian defense ministry, including Spetsialnyi Tekhnologicheskiy Tsentr (Special Technology Center), which produces drones for the Russian army. For this reason the company is under sanctions.
In particular, “Radioline” → was tasked with supplying KeySight Technologies‘ devices to → Spetsialnyi Tekhnologicheskiy Tsentr.
The key person in the deliveries was the procurement manager of Spetsialnyi Tekhnologicheskiy Tsentr, Andrei Pavlovich Florinskiy. According to the leaked emails, Mr. Florinskiy received three commercial proposals for the supply of parts made by KeySight Technologies.
Moscow showed a particular interest in the products of the American company Keysight Technologies, in addition to the companies previously mentioned in journalistic investigations (Rohde & Schwarz).
Spetsialnyi Tekhnologicheskiy Tsentr received proposals from three firms for Keysight products delivery
This fact shows that obtaining Keysight’s products in Russia, despite all of the sanctions, is quite easy. Russian firms linked to defense firms can choose from a variety of suppliers.
The company named “Ritm,” a Moscow-based company, made a proposal to supply requested products for $33,5k. The list included:
- Keysight N5173BU (option: N5173B-UNT) – AM, FM, phase modulation
- Keysight N5173BU (option: N5173B-UNW) – Narrow pulse modulation
- Keysight N5173BU (N5173B-1EA) – High output power
- Keysight N5173BU (N5173B-UNZ) – Fast frequency switching > 1.15 ms and ± 0.05% of the final frequency
The company named “Dipol,” based in Saint Petersburg, proposed to supply these goods for almost the same price – $33,2k. But the tender was won by the third contender, known from previous journalistic investigations, a firm named “Radioline”, based in Moscow.
“Radioline” proposed to supply the requested Keysight technology for $31k in 2-3 months
“Radioline” proposed to supply the requested Keysight technology for the lowest price of $31k, two thousand dollars less than two other contenders. Apparently, this firm has the most efficient supply chain through intermediaries in third states.
“Radioline” claims to offer the following services: measurement automation, radio frequency complexes, software development, measuring instrument supply, and mobile measuring laboratories.
In the commercial proposal, signed by the leading engineer Mikhail Vladimirovich Mulminov, “Radioline” suggested the following terms of delivery:
- Delivery time is 8–12 weeks from the date of the advance payment receipt.
- Prepayment: 85% within 10 days from the date of contract signing, final payment within 10 days from the date of full delivery of goods.
- Delivery to the buyer’s warehouse at the buyer’s address.
Other leaked emails contained the contract between the two Russian companies for the delivery of Keysight tech products.
Radioline Limited Liability Company (Radioline LLC), hereinafter referred to as “Supplier”, represented by Technical Director Andrey Alexandrovich Nebogin acting on the basis of Power of Attorney No. 1 dated May 1, 2022, on the one hand, and Limited Liability Company “Special Technology Center” (LLC “STC”), hereinafter referred to as “Buyer”, represented by General Director Roman Dmitrievich Agafonnikov, acting on the basis of the Charter, on the other hand, jointly referred to as “Parties”, and each separately as “Party”, have concluded this Supply Agreement as follows…
SUPPLY AGREEMENT No. 23/04/28-21 contains the date “April 28, 2023.” One can assume that these deliveries occurred. On May 15, they received another contract, No. RI-CST-009.
The question is to which companies (intermediaries with no doubts) did Keysight Technologies ship its products in 2023? A deep dive into their activities can reveal the whole supply chain of Western electronics and advanced technologies to Russian firms linked to the defense industry.
Protech also supplied Western technology to the sanctioned Spetsialnyi Tekhnologicheskiy Tsentr
The emails revealed that Radioline is not the only front company to acquire Western technology for Spetsialnyi Tekhnologicheskiy Tsentr. Spetsialnyi Tekhnologicheskiy Tsentr secured a deal with Protech, with CEO Denis Nokolaevich Koval representing them, for the delivery of Western technologies.
In a separate document, we have seen a list of Western tech parts that the STT desires to purchase. It includes three devices produced by Keysight:
- Keysight Vector wideband oscillator >12GHzKT-M8195A-002
- Keysight 53230A Frequency Meter
- Keysight High input power optical power meter; spectral range: 970–1650 nm; FHP2B04
Spetsialnyi Tekhnologicheskiy Tsentr is under sanctions, but not Radioline and Protech
For a simple reason, Spetsialnyi Tekhnologicheskiy Tsentr (STT) is unable to acquire Western components directly: it has been under US sanctions since December 2016 and under EU sanctions since December 2022. The company faced penalties for aiding Putin’s regime in its war efforts.
Two sham companies, Radioline and Protech, import Western advanced technologies that can be used for military purposes for the well-known company that has been under sanctions for years.
Sectoral sanctions are needed, as Russia can create new front firms to evade restrictions
So, if sanctions operate this way, they will never work. Instead, the supply of sensitive and advanced technologies from Europe and the United States to Russian companies fuels Putin’s war, negating the efforts of the EU and the United States to support Ukraine in repelling Russian military aggression.
Even if the two fictitious intermediary suppliers are subject to new sanctions, Moscow will be able to create new fake companies to obtain the necessary parts for the STT. After all, there were already at least two companies that had the opportunity to obtain Keysight products but were not selected by STT.
In such circumstances, only sectoral sanctions have a chance of working, with a complete ban on the supply of any products sensitive to Russia at all. To any company in Russia, because it doesn’t take much effort for the Kremlin to create new front companies.
Ideally, the sanctions would be effective if the Western states that have already been caught helping the Kremlin circumvent sanctions, such as China, Kazakhstan, the UAE, and others, joined the ban on sensitive technologies from the West.
Akmetron imports to Russia Taiwanese dual-used technology made by MPI Corporation
This is proved by another supply chain used by Spetsialnyi Tekhnologicheskiy Tsentr. It enables Moscow to purchase advanced technologies from Taiwan.
As a result, Moscow-based Akmetron sent a proposal for the supply of equipment manufactured by MPI Corporation, whose official distributor is in Russia.
According to the commercial proposal, seen in the leaked emails, Akmetron provides STT with the following terms and conditions:
- Payment: advance 50% within 5 days from the date of contract signature; the balance 50% within 5 days from the date of receipt of the equipment.
- The delivery period is up to 24 (twenty-four) weeks from the date of contract conclusion. Delivery is made to the customer’s address.
- The price includes assembly, adjustment, and training. Payment in rubles at the exchange rate of the Central Bank of the Russian Federation on the day of payment.
MPI Corporation, a Taiwan-based manufacturer of semiconductors
MPI Corporation, a Taiwan-based technology company, produces semiconductors, LED lamps, photographic detectors, laser emitters, conducts materials research, and manufactures aerospace and automotive technology, fiber optics, and electronic components. The company is not subject to sanctions.
MPI Corporation publicly condemns Russia’s military aggression. But, as the correspondence shows, this did not prevent the company from delivering its products that could be used for military purposes to an official supplier in Russia.
MPI TS150 Probe Station for $154,700
A contract for the leaked documents has been awarded to MPI TS150 Probe Station for $154,700. The station consists of:
- The base unit includes a table top for arm mounting, a lift/contact mechanism, and a bridge for microscope mounting.
- The OP-5050M microscope hand drive with 50×50 mm travel
- 150mm RC-150CR plate holder for room temperature measurements in a coaxial design
- EZ10 microscope with magnification 10X
- HDMI video camera, MPI 1080
- ICH-UNI single specimen holder with a 1×1 mm dimension.
- PAS-FBH-ADJ fiber holder, 2 pieces.
- Optical grating holder PA-FA-FBH-ADJ-XXX, 2 pieces.
- MP40 manipulator (4 pieces).
- West-direction probe holder – 1 pc.
- East-direction probe holder: 1 pc.
- North-south direction probe holder – 2 pieces.
- Multi-contact probe TM6-GPPPPPPPPPPG-150, 2 pieces.
- Multi-contact probe TM6-GSGGSG-150, 2 pieces.
- Multi-contact probe TM6-GSGSG-150, 2 pieces.
- Vacuum pump.
- Compressor.
- Accessory kit.
Ways to prevent Western dual-use technologies from ending up in Russian army’s hands
Adding corporate responsibility to Western electronics manufacturers in current conditions could help prevent their products from reaching the Russian regime and being used in their military industry to fuel its wars in Ukraine.
After all, the risk will always be there, as Keysight’s products directly serve the aerospace and defense industries. Companies in the defense industry that produce items for weapon manufacturing or maintenance must uphold high corporate responsibility.
Especially if it has already been revealed that their devices and components have already been purchased by sham firms supplying Putin’s belligerent regime, which is waging an aggressive war in Ukraine, killing thousands of innocent civilians.
Sectoral sanctions, sanctions enforcement and monitoring, and corporate responsibility
On the other hand, the governments of Western nations, including the United States, have a responsibility to prevent the supply of products from their countries to criminal regimes. The adoption of the latest sanctions packages in December 2023 and February 2024 reduces the possibility of circumventing sanctions.
All companies that supply Russians with products that could serve military purposes should face punishment. The oversight of the sale of modern electronics and dual-use products and the enforcement of sanctions should be strengthened.
Ultimately, only full enforcement of sanctions and the closure of Moscow’s schemes to circumvent them will guarantee the necessary pressure on the Russian economy to force it to abandon its war operation against Ukraine and to deplete its arms production.
Without sanctions enforcement, efforts to provide military support to Ukraine will have much less effect. And maintaining arms production in Russia means bringing the war closer to the EU’s borders and encouraging the Kremlin to commit new aggressions, possibly against European and NATO countries.
Making efforts and taking measures to stop the supply of dual-use goods to Russia is more cost-efficient than the costs that would be required if the war were to expand.
