The Russian Federation buys components for its drones abroad: who is the largest supplier

Reuters agency published data on the supply chain of parts for Russian drones used in the war against Ukraine. Companies from various countries, including the USA, are involved in this scheme.

The “Orlan 10” UAV is a relatively low-tech and cheap drone, with the help of which the occupiers direct artillery shells at Ukrainian defenders. It is produced by the sanctioned Special Technology Center (St. Petersburg), whose main customer is now the Russian Ministry of Defense.

“An investigation by Reuters and Russian media outlet iStories in collaboration with the Royal Joint Services Institute, a defense think tank in London, revealed a logistics trail that spans the globe and ends at the Orlan production line, the Special Technology Center in St. Petersburg, Russia,” the article says.

Among the most important suppliers to Russia’s drone program was Hong Kong-based exporter Asia Pacific Links Ltd, which according to Russian customs and financial documents, made millions of dollars worth of supplies in installments, but never directly. Many of the shipments are microchips from US manufacturers. Asia Pacific’s owner, Anton Trofimov, is a Russian expatriate who graduated from a Chinese university and has other business interests in China as well as a company in Toronto, according to his LinkedIn profile and other corporate filings.

Asia Pacific’s exports to Russia were mainly supplied to a single importer in St. Petersburg, which had close ties to the Special Technology Center, these customs records show. Importer SMT iLogic shares a common address with the drone manufacturer and many other connections.

Journalists described Asia Pacific’s office as a shabby building near a side alley and a pedestrian market in Hong Kong’s business district. During the journalist’s visit to this office, no one was there. According to the building administrator, the company shares a room with three other tenants.

“In the seven months from March 1 to September 30, since the Russian invasion in February, Asia Pacific has grown its business dramatically, exporting about $5.2 million worth of parts, compared to about $2.3 million in the same period in 2021 year, making it iLogic’s largest supplier, according to the data. Records also show that many of the components were made by U.S. technology firms,” the reporters said.

Among the parts Asia Pacific sent to iLogic in the same period in 2022 were $1.8 million worth of chips made by Analog Devices ( ADI.O ), $641,000 from Texas Instruments ( TXN.O ) and $238,000 from Xilinx, according to Russian customs information. The shipments also included models of the Japanese company Saito Seisakusho’s aircraft engines used in the Orlan 10, as shown in photographs of the drones found in Ukraine. Saito said they were unaware of the shipments.

Analog Devices did not respond to emailed questions about shipments to Russia in recent months. Texas Instruments and AMD ( AMD.O ), the owner of Xilinx, said their companies have not directly shipped or approved shipments to Russia for many months and comply with all U.S. sanctions and export controls.

AMD added that it requires its authorized distributors to implement end-use verification measures to monitor the potential sale or diversion of AMD products to Russia or restricted regions. “SMT iLogic and Asia Pacific Links are not authorized AMD distributors,” the company said.

Financial records provided by a Russian official and reviewed by Reuters show that the Special Technology Center relies on a number of suppliers, but the most prominent is iLogic. According to a record of iLogic’s own bank receipts and payments seen by Reuters, iLogic works almost exclusively for the drone maker.

According to customs data, since 2017, iLogic has imported approximately $70 million worth of electronic products into Russia. And according to financial documents reviewed by iStories and Reuters, nearly 80% of the company’s revenue comes from its Special Technology Center business.

In turn, the same financial documents show that the largest customer of the Center of Special Technologies is the Ministry of Defense of Russia, which paid it almost 6 billion rubles ($99 million) from February to August of this year. The main shareholder of the Center Oleksiy Terentiev confirmed that the war forced him to focus on the production of unmanned aerial vehicles.

Terentiev declined to say whether iLogic is one of the suppliers. When asked about iLogic, he said, “You’re asking me about a company I don’t know.” Recalling that he is listed as one of the founders of iLogic in Russian corporate records, he said that his name appeared in the documents “probably correctly.”

“Yes, I remember something… I lost touch with this company,” he said.

On the coast of southeast Florida, another person who makes supplies for Russia’s drone program lives in a posh suburban home right behind a nature preserve. Igor Khazhdan, a 41-year-old US-Russian citizen, owns IK Tech, which sold about $2.2 million worth of electronics to Russia between 2018 and 2021, according to Russian customs, more than 90% of which was sold to iLogic.

Russian customs records show that IK Tech sold about 1,000 American-made boards to iLogic between October 2020 and October 2021, at a time when federal law prohibited the supply of any such technology to the Special Technology Center, either directly or through another company. The boards, worth about $274,000, were made by California-based manufacturer Gumstix. The California-based company told Reuters it was “very concerned” about the supply information and would investigate. The company said it has no customers in Russia and no products or services destined for Russia, adding: “We will take all necessary steps to address any identified diversion of products from legitimate end-uses.”

Khazhdan was charged weeks before the full-scale raid with 13 counts of smuggling and evading export controls in the sale of electronic components to Russia between December 2021 and February 2022.

Journalists say the investigation, based on Russian customs and bank documents, marks the first time a supply of American technology has been traced back to a Russian manufacturer whose weapons system is used in Ukraine.

The special technology center in St. Petersburg used to make a variety of surveillance gadgets for the Russian government, but now focuses on drones for the military. It first came under US sanctions after President Barack Obama said the center worked with Russian military intelligence to try to influence the 2016 US election.

The sanctions, which went into effect in 2017, prohibit any US citizen or resident or US company from supplying anything that could enter the Special Technology Center. In March of this year, the U.S. government tightened those restrictions by blocking all sales of any American products to any military end user, effectively blocking all sales to Russia of high-tech goods such as microchips, communications and navigation equipment.

“None of this has stopped production of the Orlan drone.” The Center for Special Technologies did not respond to a written request for comment. But one top scientist, who is also a major shareholder, told Reuters in an interview that the company is experiencing “high demand” for its drones,” the journalists noted.

The Russian Defense Ministry did not respond to questions from Reuters about the impact of the sanctions and its relationship with the Center for Special Technologies.

The U.S. Commerce Department, which oversees exports of U.S. technology, would not comment on its knowledge of the Special Technology Center or the U.S. parts that supply Russia’s drone program.

In a statement to Reuters, a Commerce Department spokesman said the department could not comment on whether or not there was an investigation. The spokesman added: “We will not hesitate to use all the tools at our disposal to thwart the efforts of those who seek to support Putin’s war machine.”

We will remind that Western components are also used in Iranian drones, which Russia uses against Ukrainians. The Mohajer-6 shot down in Ukraine made it possible to find out what exactly the country sponsoring terrorism is made of. GUR of the Ministry of Defense reported that most of the components are from the USA. It also has an Austrian engine and a Japanese camera.

According to the intelligence officer, no Russian elements were found in the device. One element has an inscription in Farsi. Visible range camera – Japan. Chinese-made laser range finder. An Iranian-made aerial bomb.

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