Suppliers of death. The Insider has identified over 300 companies making purchases in the interests of the Russian military

The US, European Union and UK face two main challenges when imposing sanctions on Russian military production. Firstly, it is not always clear what products are imported specifically for the military. Secondly, in place of the company that came under sanctions, a new one will soon grow, and while new restrictive measures are introduced, the military-industrial complex has time to adapt. But there is a way to solve this problem. After studying data on domestic supplies and comparing them with customs data, The Insider identified more than 300 companies making purchases specifically for the military-industrial complex. If they are included in the sanctions lists at the same time, this could seriously hit Russian military production.

Content

• How suppliers were identified

• Indispensable

• The tip of the import iceberg

• Old people, giants, subcontractors and speculators

A list of the most important importing companies trading with the military-industrial complex can be found on GitHub .

Available in English

How suppliers were identified

Enterprises of the Russian military-industrial complex rarely import products themselves. As a rule, they use the services of intermediaries to purchase raw materials, workpieces, machinery, equipment and spare parts. These are mainly small and medium-sized companies that are entirely owned by private individuals (unlike the military-industrial complex, where companies traditionally have a significant or controlling share of ownership owned by the state).

Such structures more easily bypass bureaucratic obstacles and have free funds to informally overcome Russian customs barriers. The fundamentally market-based nature of this sector, combined with high competitiveness, is one of the main reasons for the sustainability of the Russian defense industry.

The Insider regularly writes about specific intermediary operations (for example, about Greek smugglers or German factories ) and about the structure of this foreign trade intermediation market, both in individual industries ( supplies of Taiwanese machine tools) and in general ( supplies from Europe ).

The chain of transactions that can be traced from a foreign manufacturer to a Russian buyer often stops at the latter. Only by indirect evidence can we come to the conclusion that the goods ultimately ended up at a military enterprise. This often becomes clear only after the fact, when Western parts are found in the remains of missiles and drones fired at Ukraine.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

Wreckage of a Russian X-101 with American components

However, the use of new methods allowed The Insider to restore such chains en masse for the first time.

Having received data on transactions in the domestic market (in the interests of the investigation, we do not disclose the source of the data) and comparing them with customs data, The Insider analyzed which foreign trade participants entered into transactions with leading military-industrial complex enterprises (we included about 160 key military-industrial complex enterprises as such) in 2024.

The selected 160 enterprises are an important part of the military-industrial complex, but the real number of intermediaries is much wider. The Insider's analysis so far only covers the tip of the iceberg, but this is only the beginning of the investigation.

In total, according to customs data, in 2024, about 10 thousand Russian companies became importers of sanctioned products worth a total of more than $22 billion. Of these, more than 2 thousand companies turned out to be counterparties of leading military-industrial complex enterprises. According to data obtained by The Insider, these contractors made direct deliveries to leading military-industrial companies worth more than 80 billion rubles, that is, about $1 billion.

The total volume of sanctioned goods imported into the country by defense industry contractors is more than $5 billion (only supplies worth more than $20 thousand are taken into account). However, not all products are necessarily consumed by the military-industrial complex; a significant part is also in demand in the civilian sector.

In addition, deliveries often do not take a short route, but through a whole network of intermediaries. Thus, among the leading military-industrial enterprises studied by The Insider, only slightly more than half of the enterprises deal directly with importers of sanctioned goods.

Indispensable

A significant part of the sanctioned components cannot be replaced with analogues; their absence would be critical for the Russian defense industry.

Thus, Japanese installations for laser plasma-chemical etching of SMC Corporation are in demand in domestic electronics, which are produced in Zelenograd and installed in those military products where Chinese ones cannot be supplied. In 2024, Kontrakt Holding JSC imported such an installation for the well-known Russian microchip manufacturer Mikron JSC, an army supplier under sanctions. Microchips are needed in almost any modern weapon.

FPGAs are vital for military equipment - they are the “brains” of any systems whose navigation is based on terrain recognition. They are used, for example, for a number of modifications of Geranium drones. In the interests of the military, Uniserv LLC imported FPGAs from the manufacturer Xilinx to Russia in 2024. It supplied goods to the drone manufacturer STC LLC , which is under sanctions.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

Geranium drones require FPGAs from Xilinx

Measuring machine sensors are used in the military industry for precision manufacturing of parts. Such sensors from the British company Renishaw, whose products lead the world market in quality, were imported in 2024 by GC Intratool LLC, which traded with the sanctioned engine-building company PJSC UEC Saturn.

The tip of the import iceberg

The fact of even a single transaction between an importer of sanctioned products and a military plant is already a red flag that requires closer attention to all participants. However, in order to exclude very small transactions, The Insider selected from the importer-counterparties of leading military-industrial complex enterprises only those who supplied goods worth more than 1 million rubles to military factories. There were more than 300 such importers. Their supplies to leading military-industrial complex factories amounted to 11 billion rubles, and their imports amounted to about $2 billion.

Thus, imports from the company Rustakt , a manufacturer of drones and an importer of lithium-ion batteries for drones, amounted to 30 billion rubles. The company concluded transactions with the military-industrial complex, which were confirmed by The Insider, in the amount of 13 million rubles.

A number of companies import milling and turning machines, some of which are supplied to the military-industrial complex. Among them are “Machine Operator’s World”, “I Machine Technology”, “AMG”, “Promservice”, Baltic Industrial Company. The Insider has already written about the cooperation of some of them with the military-industrial complex.

It is clear that it is the military-industrial complex enterprises that now most need to update their fleet of metalworking machines. The Insider was able to confirm only a small number of transactions. However, given the real needs of the sector, there are likely to be much more.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

It is the military-industrial complex enterprises that now most need to update their fleet of metalworking machines

High-precision oscilloscopes and signal generators are in demand in electronic warfare devices. They are supplied by the Dipole group (see details ). According to data obtained by The Insider, Dipol is a regular supplier of the military-industrial complex.

Old people, giants, subcontractors and speculators

Importing companies that traded with the military-industrial complex can be divided into four groups.

The first group includes manufacturers who buy sanctioned goods directly, without intermediaries. These are fully or partially state-owned old factories - manufacturers of the military-industrial complex , which both conducted foreign economic activity and produced products that were then sold within the Russian military-industrial complex.

These include KRET , UEC , Ural Optical-Mechanical Plant, United Instrument-Making Corporation and Kazan Helicopter Plant. Such schemes (foreign economic activity coupled with military-industrial production) are to a large extent an exception. Basically, military-industrial complex enterprises do not deal directly with foreign countries. This is difficult both because of the bureaucracy in large-scale production and because of the sanctions that more or less all of them are under.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

Due to bureaucracy and sanctions, military-industrial complex enterprises do not deal directly with foreign countries

The second group of buyers of sanctioned parts are industrial giants producing large-scale products (steel, cast iron, aluminum, petroleum products). For the military-industrial complex, these manufacturers are critical, but the military-industrial complex is not for them, since they will always have plenty of civilian buyers (builders, road workers, miners, automakers).

Many of these enterprises are not sanctioned, despite their scale and economic importance to Putin's Russia. This is, apparently, a conscious policy of the Western powers, which will lose more from rising prices for the goods produced by these giants than they will gain from a decrease in the turnover of their activities.

The third group includes related enterprises that produce individual important components, blocks or assemblies in Russia for the military-industrial complex , but which are significantly dependent on the import of raw materials and components into the country. This is the most interesting group of private importers doing business with the military-industrial complex. Examples of such enterprises and their products (in descending order of their trade volume with the military-industrial complex) are in the table below:

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

Such subcontractors are mostly private traders. They are flexible enough to import the parts and components they need themselves. At the same time, they, of course, take risks when entering the foreign market, since they understand that they can become noticeable. If they fall under sanctions, they will have to look for intermediaries for foreign economic activity. With hundreds of employees, complex assets, licenses and certifications, they cannot close down and reopen from scratch.

Finally, the fourth and largest group of importers are resellers , that is, classic intermediaries. These are usually private companies in the form of an LLC with a small number of employees. They specialize in wholesale trade in a fairly narrow sector - for example, metalworking, electronics or measuring instruments.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

Among the resellers there are a few large retail chains whose clients include individuals and legal entities in the civil sphere, but there are also orders from the military-industrial complex.

The largest group of resellers are suppliers of metalworking machines and spare parts for them. In addition to the machine operators already mentioned above, these include Unimatic, Ameka, Promarsenal Company, Rosmark-Steel JSC, Soyuz Engineering, IPR Equipment, MT Machinery, STS Technology, Grant-Trade, Inkor.

Resellers of electronics, boards, microcircuits, radio components, connectors, telecommunications equipment and industrial automation systems are less visible. Partly because in 2024, customs began to hide data on some electronic components.

These are, for example, Trimix, Uniservice, Radiofeed Systems, Bee Pitron. Among them there are both suppliers of finished foreign products (mainly Chinese) and companies that accept orders in Russia for the manufacture of electronics according to the specifications of a Russian company.

However, some of the resellers, such as Bee Pitron, also produce their own products, company representative Vasily Malyshev said at the Army 2024 forum. His company said it has developed an import-substituting optical signal converter for the military. However, claims that all elements of the communication line are made from Russian components raise serious doubts.

Particularly interesting are companies whose import turnover approximately coincides with their turnover in transactions with the military-industrial complex. These include, for example, the aforementioned Bee Pitron, which uses front companies in Indonesia to supply wires and cables. The close to unity ratio of imports and transaction turnover, as well as the absence of such companies in the public space (as a rule, they do not have offline stores or clear websites with catalogs), indicate that these companies are purely shell companies of military factories.

Western countries have only partially included importers and resellers on the sanctions lists with the largest volume of transactions with the defense industry. Resellers that are medium and small in terms of the volume of transactions with the military-industrial complex are generally not subject to sanctions at all.

Resellers import not only Chinese equipment. The leader among “Western” brands traditionally remains the Japanese machine-tool manufacturer Tsugami. Among the countries of origin, in addition to Japan, the leading countries are Taiwan, Korea and Switzerland.

A programmable logic integrated circuit (FPGA) is an electronic component (integrated circuit) used to create configurable digital electronic circuits.

JSC Concern Radioelectronic Technologies (KRET) produces electronics.

JSC United Engine Corporation, engine production.

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