Hunters and sport shooters only?

Journalists who reviewed Leica Camera’s Russian corporate records believe the company continued exporting high-end rifle scopes to Russia even after it reportedly withdrew from the market. Leica itself denies this.

The German camera manufacturer Leica Camera AG announced its withdrawal from Russia shortly after the start of Russia’s full-scale invasion of Ukraine. Afterwards, it turns out, Leica never made good on this commitment. The Insider, an independent Russian investigative project, has established that not only did Leica never leave the Russian market, but it also increased its range of imports to Russia. This was part of Leica’s apparent effort to capitalize on the potentially lucrative “dual-purpose goods” market for optical equipment suited for general consumers and the military alike. Leica now supplies Russia with binoculars equipped with laser rangefinders and with night-vision rifle scopes.

After this article first appeared, Leica Camera AG issued a statement to the effect that it “firmly rejects the allegations” made by Meduza’s source, The Insider. This article has been updated in light of Leica Camera AG’s comments and further explanations from The Insider.

Leica’s corporate records in Russia, as reported by The Insider

Leica Camera announced its departure from Russia in mid-March 2022, less than a month into the invasion of Ukraine. Around the same time, the company also said it was going to close its only branded retail location in the country, in the Moscow GUM shopping gallery.

But Leica’s corporate records tell a different story, writes The Insider. Russia’s Unified State Register of Legal Entities shows that Leica’s Russian LLC, Leica Camera Russia, was renamed to Vechernyaya Zvezda (“Evening Star”) on April 6, 2023. Apart from the name change, though, its structure has remained entirely the same. A 99-percent stake in Vechernyaya Zvezda still belongs to “Leica Camera Austria GmbH,” according to the ledger. The CEO listed in the Evening Star’s Articles of Incorporation is Leica Camera Russia’s old CEO, the German citizen Klaus Hauer (previously employed by Volkswagen’s corporate office in Russia).

Further, since the start of the war, Leica’s Russian LLC began filing more declarations for importing dual-purpose goods suited for the general consumers as well as the military. (Such declarations are filed to clear the first shipment of the specified goods through customs. Subsequent shipments are usually cleared under the same declaration.) Even after news of the Russian army’s atrocities in Bucha emerged in the international press, Leica’s Russian LLC filed three separate declarations for military-grade binoculars and rifle scopes: they were dated July 6, November 18, and December 15, 2022.

The LLC’s financial statements also raise some questions (or perhaps suggest some answers as to the reasons for the company’s behavior). For two years in a row, The Insider points out, the company’s management expenses exceeded its sales revenue. Leica’s losses in Russia in 2022 alone amounted to 29.3 million rubles (or about $364,000). Overall, this outlook is far more typical of companies trying to enter emerging markets than those fleeing from markets embroiled in wars of aggression.

What Leica has to say about The Insider’s investigation

Leica Camera AG insists that The Insider’s allegations of its “support of Russia’s aggressive war in Ukraine” are completely false, and so is the information about its military-grade exports to Russia after its declared withdrawal from the Russian market. “The last delivery of the products mentioned in the article to the Russian subsidiary,” the corporate statement says,

took place at the end of February 2022 and thus indicates that shortly after the outbreak of the Russian war of aggression Leica Camera AG promptly implemented all relevant measures to obey the voluntary export ban. This also includes the closure of the Leica Store in Moscow and the decided implementation of the liquidation of the company Leica Russia at the end of 2022. Leica Camera AG has thus fully withdrawn from the Russian market, support of the Russian war of aggression is therefore purely factually impossible.

Leica denies having circumvented any war-related sanctions, as well as the possibility that the marksmanship equipment mentioned by The Insider could possibly have military applications:

Moreover, the products mentioned in the article are purely for civilian use in the field of application for hunters and sport shooters. In accordance with an updated resolution of the Board of Management in August 2022 all companies of Leica Camera AG are prohibited from bringing devices and applications for military use onto the market.

What Leica Camera AG has not clarified in its statement is the relationship between Leica Camera Russia (its outmoded Russian subsidiary) and Vechernyaya Zvezda (“Evening Star”), a new corporation that appears to inherit the structure of the dissolved LLC. Leica has also abstained from comment on the Evening Star’s relationship with the Austrian holding, Leica Camera Austria GmbH, even though this question is clearly relevant to The Insider’s conclusions.

The German company has also remonstrated that The Insider’s article came out without an author byline. In fairness, it should be mentioned that The Insider has been officially outlawed in Russia since the summer of 2022. When persecuted as an “undesirable organization,” independent media outlets often opt not to publish author bylines, since this could endanger contributors working in Russia and possibly lead to felony charges against them under Vladimir Putin’s repressive legislation.

Nevertheless, Leica Camera AG has told Meduza that the company would have liked to have spoken with The Insider prior to the publication, and that they couldn’t get in touch with the editors when the investigation was published, for lack of “any contact information.” But The Insider’s website does, in fact, list an email address for getting in touch. The independent media outlet has, in turn, told Meduza that it did send queries to Leica Camera AG prior to the publication.