The Russian regime continues to manufacture missiles, drones, shells, and military equipment for its war in Ukraine. The Kremlin is able to obtain the majority of the components from Western countries, as revealed in several studies.
The KSE Institute (Kyiv, Ukraine) conducted a research that shows that export limitations have influenced trade flows, but Russia still imports large volumes of parts necessary for its military manufacturing.
According to the report, Russia bought $8.77 billion in warfare items from January to October 2023, while imports of components vital for weaponry production totaled $22.23 billion. Moscow continues to be able to buy huge quantities of commodities that we believe are very important for its military industry. This suggests that export control enforcement is facing significant hurdles.
Western companies produced 44% of the total supply of components acquired by Russia for the manufacture of weapons, the study concluded.
Countries used by Russia for sanctions evasion and components imports
The KSE experts examined a total of 2,800 components imported by Russia. Sensors, microchips, navigation systems, and other technology are required by the Russians in order to manufacture weapons.
Researchers discovered pieces of well-known international companies in Russian weapons discovered in Ukraine: Intel, Analog Devices, AMD, Texas Instruments, and Siemens.
Since the enactment of restrictions, supply chains have evolved, and the majority of the commodities in question now arrive in Russia via third-country intermediaries, particularly China. Almost half of all imports in the first 10 months of 2023 were items produced on behalf of companies based in Western nations, Ukraine’s allies, indicating major enforcement issues.
Export controls pose significant enforcement issues due to the complexity of global supply networks, the absence of large economies such as China in the sanctions coalition, and the help from Russia’s neighbors in Central Asia, as well as Turkey, Armenia, and the UAE.
As a result, Russia continues to import essential parts required for military manufacturing. In the first ten months of 2023, Russia imported priority items for weapons production from the U.S., EU, UK, and other partners of Ukraine for $8.77 billion. It represents only a 10% decline compared to Russia’s imports of these goods in the pre-sanctions period.
Read also: Stopping China’s electronic exports to Russia can help to end the war in Ukraine
Critical items that Russia imports for its military manufacturing
When we look at the Western-made parts critical to Russia’s defense industry, the imports in 2023 were higher than in the same period before Putin’s war: $22.23 billion. In 2023, manufacturers from Western nations, Ukraine’s allies, will account for nearly half of all Russian imports of items used in the military industry.
- Communications equipment ($2.76 billion in January-October 2023, or 31.4% of total);
- semiconductors ($2.06 billion, 23.5%);
- other electronics ($1.78 billion, 20.3%);
- computer parts ($1.37 billion, 15.6%).
Seven categories demand special consideration when it comes to key components:
- Other electronics ($5.37 billion, 24.2% of total);
- communications equipment ($3.38 billion, 15.2%);
- computer parts ($2.94 billion, 13.2%);
- semiconductors ($2.21 billion, 9.9%);
- bearings and transmission shafts ($1.33 billion, 6.0%);
- navigation equipment ($1.01 billion, 4.6%).
Ukraine’s National Agency for Corruption Prevention listed nearly 2,800 individual parts found in Russian weapons on the battlefield, including missiles, drones, armored vehicles, and other systems, as well as the companies that manufactured them.
95% of the parts detected in Russian weapons on the battlefield were produced in Western countries, with corporations based in the US alone accounting for 72%. These findings highlight the persistent difficulties in the lack of sanctions enforcement and the prevention of sanctions evasion. Export controls continue to be a key tool for constraining Russia’s military effort.
Third-country intermediaries, particularly in China, Kazakhstan, Turkey, and the UAE, now account for the vast majority of sales and exports to Russia. The majority of battlefield equipment and vital components currently arrive in Russia via third-party countries.
Between January and October 2023, Western-based manufacturers were responsible for at least 43.9% of battlefield items and 32.8% of crucial components. In the first ten months of the year, entities located in the United States alone accounted for 25.5% of battlefield items and 15.1% of critical components, followed by those headquartered in the EU and Taiwan.
List of top manufacturers of components found in Russian weapons
In terms of specific companies, we discover Intel (US), Analog Devices (US), AMD (US), Texas Instruments (US), and IBM (US). Because of the larger vital component sample, new firms such as Samsung and Hyundai (both from South Korea) have made the top list for these goods.
Outside the Western world, it is mostly Chinese producers, such as Huawei and Lenovo, who play a role in Russia’s continuous access to both sets of commodities.
- Intel
- Huawei
- Analog Devices
- AMD
- Texas Instruments
- Lenovo
- IBM
- Samsung
- Dell
- Inspur Electronic
Controlling the export of dual-use commodities is a difficult task. However, it is vital to ensure the implementation of these measures and send a strong message to anyone who may choose to disrupt a rules-based international order and support Putin’s war efforts.
Expert advice on how to prevent sanctions evasion
The KSE experts suggested several strategies to improve sanctions enforcement and close loopholes and evasion schemes. We list top-3 here below.
Increasing corporate accountability is key since improving export control enforcement is impossible without the participation of the private sector, particularly Western-based producers of commodities required by Russia’s defense industry. Any efficient supply chain control must begin with the initial sale of an item to a distributor, as it becomes progressively difficult to identify its physical whereabouts and thwart any criminal activity after the sale.
Closing policy loopholes in export controls is necessary to prevent Russia from acquiring components for its weapons. Significant anomalies remain in Russia’s export control regime, impeding efficient enforcement and allowing for circumvention.
According to the experts, Western coalition jurisdictions should harmonize restrictions, derogations, and licensing procedures, as well as the punishment of sanctions infractions and negligence rules that outline the procedures corporations are expected to follow.
Applying strict control of the trade with third nations caught in helping Russia with sanctions circumvention. Western governments have to address the involvement of third-country intermediaries in export restriction evasion schemes, including those in China, Turkey, and the UAE. They can accomplish this by sanctioning entities found to support export control crimes involving any companies or individuals from allied countries.
Read also: How to halt parallel imports of banned goods from Kazakhstan to Russia?
Latest sanctions package targets sanctions evasion schemes
In December, the United States, United Kingdom, and European Union adopted the newest sanctions packages to punish corporations that assisted Russia in circumventing sanctions, deter future sanctions evasion, and eliminate any loopholes in illicit international trade.
In January 2024, a European Commission representative said that EC is working “around the clock” to close possible loopholes that allow Russia to circumvent sanctions by supplying components needed to manufacture weapons used in the war against Ukraine.
The 12th package of EU sanctions aims at blocking all sanctions evasion schemes. Nevertheless, Brussels will need to ensure that the sanctions are implemented and prevent potential evasion schemes, with a special focus on the countries that were caught helping Moscow circumvent trade restrictions.
Enforcing the sanctions regime will finally deplete Russia’s economy and halt its weapons production capacity. Such circumstances may force Putin’s leadership to halt the war in Ukraine.
The concern is whether anti-Russian sanctions can be effective if third-country firms are still free to purchase sanctioned commodities from the US and the EU without being able to trace their eventual destination. Isn’t it time to halt our trade with Russia’s de facto allies? After all, if the West fails to enforce the sanctions regime, aid to Ukraine and penalties against Moscow for its war will have little impact.
The absence of sanctions enforcement will interpret Russia’s permissiveness in continuing the war in Ukraine. All of this will make it hard for Ukraine to prevail, move the conflict closer to the EU’s borders, and free the Kremlin to initiate action against European NATO member nations.
