The German manufacturer of combined harvesters helps Russia to circumvent sanctions

Die Zeit and Radio Hochstift investigation, in which it was revealed that the Claas company, which is the largest Western manufacturer of agricultural machinery, had developed a strategy to circumvent sanctions against the aggressor country to supply dual-purpose goods there.

Why are Claas products subject to sanctions?

In 2005, the company opened a factory for the production of combines in Krasnodar, Russia. A significant part of the production components was delivered there directly from the German Claas plant. The problem is that some of these components are subject to a ban on export from the EU. The Krasnodar plant suspended its activities, and the company started developing a plan to get out of the situation.

What was the plan to circumvent the sanctions?

Export-prohibited components are installed in prefabricated units, that is, larger parts. Essentially, the sanctioned goods were assembled into a new product to receive a different customs classification, or the prohibited goods are exported to Russia, being hidden inside the final product that is not subject to sanctions.

In the summer of 2022, Claas sent the first shipment to Russia. Estonian customs (transit country) found a violation of export restrictions in the exported Claas product and sent part of it back. However, at the end of October 2022, Germany’s supply of steering control kits reached Russia.

Thus, according to the results of a journalistic investigation, internal documents of the combined harvester group, available to ZEIT and the local broadcaster Radio Hochstift, show how Claas planned to circumvent export restrictions for months systematically.

According to a high-ranking executive, the group was working on implementing a secret project in Germany, which was supposed to be implemented no later than July 2022. From March 2023, it was planned to resume production at the company’s plant near the Black Sea. For this, the manufacturer of agricultural machinery planned to use a legal loophole in the embargo rules.

To be able to resume production of a complex Russian product, the Tucano combine harvester, the Claas plant in Krasnodar needs to receive many individual parts. Currently, the plant is intended only for component production, therefore, without the supply of components from abroad, it is impossible to assemble new equipment there.

Since many parts are not manufactured locally due to the lack of manufacturers of the corresponding product group in Russia, they are assembled at the German Claas plants in Harzewinkel or Paderborn. However, 507 items of parts are currently banned from EU exports, including V-belts, hydraulic cylinders, gas springs, silencers, or steel pipes for complex combine harvesters that weigh tons, are huge in height, and resemble mobile harvesting factories.

However, the specified individual parts can be used for the production of military equipment with the same success, that is, they are considered dual-purpose goods. That is why the EU banned their supply to Russia. According to the Foreign Trade and Payments Act, anyone who knowingly exports such goods faces up to five years in prison.

What measures are being taken to stop sanctions evasion

It is reported that an investigation into Claas’ activities regarding the violation of EU sanctions has already begun. Because of this story, Ruta Bajarunaite, the head of the sanctions group at the Ministry of Foreign Affairs of Lithuania, proposed the following measures to increase the effectiveness of the fight against sanctions evasion:

Creation of new criteria for inclusion in the sanctions list of those who circumvent or facilitate the circumvention of EU sanctions;

Strengthening punishment for evading and facilitating the evasion of sanctions in the field of criminal law;

Creating a “blacklist” of companies participating in or facilitating sanctions evasion schemes.

However, let us remind you that companies that continue to cooperate with the aggressor country, paying taxes there, are thereby financing Russia’s bloody aggression against Ukraine.

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