“How much are drone coils?” The Insider and Nordsint, under the guise of suppliers of the Russian military-industrial complex, found out from Chinese exporters how they violate the law

This article is a joint investigation by Nordsint and The Insider.

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Identifying the main international sources of equipment and spare parts for the Russian army is a difficult task for investigative journalists. Standard trade and customs databases often record intermediary companies and logistics companies rather than manufacturers or actual sellers. This opacity allows international suppliers to plausibly deny their involvement in the trade of sanctioned goods. Because of this, it is almost impossible to determine how consciously companies cooperate with the Russian defense sector.

However, by contacting the manufacturers directly (via messages, but under a pseudonym), we were able to obtain convincing evidence that the supply of Chinese companies to the Russian defense industry was intentional. In conversations with these manufacturers, Nordsint presented itself as a potential Russian client and explicitly stated that the components being purchased were intended for use in war. This never bothered the suppliers. The Insider examined data on previous transactions of these Chinese companies contained in customs and trade registries.

Although the supply of drones and components is officially prohibited by Chinese law, sellers use sophisticated financial schemes to satisfy the demand of the Russian military-industrial complex. When supplying military equipment, some of the Chinese firms studied use payment in yuan through the Shanghai branch of the Russian VTB bank or settle payments in USDT (Tether), a cryptocurrency pegged to the US dollar. In this way they bypass Western financial sanctions. Some companies resort to the services of Chinese and Hong Kong banks: China CITIC Bank, DBS Bank, Ping An Bank, China Zheshang Bank, Bank of China Nanjing.