Russian defence firm buys arms components from West despite sanctions

WORLD  26 January 2023 - 23:32

A subsidiary of Russia’s state-owned defence corporation Rostec, Concern Radio-Electronic Technologies (better known by the acronym KRET), has been able to buy components for electronic warfare (EW) systems in the West through a chain of companies despite being sanctioned, according to an investigation by independent outlet IStories. 

The components are then used in weapons in Ukraine. KRET has been under sanctions since 2014, rendering it unable to legally purchase NATO-made components, The Insider reports.

The EW systems are used to suppress enemy communications and control and reconnaissance systems and to protect troops from both. Pavel Luzin, a Russian military expert, estimates that Russia spends 30-40 billion roubles ($430 to 575 million) annually on procuring electronic warfare systems.

Experts from the Royal Institute for Defence Studies (RUSI) studied 27 types of Russian weapons from battlefields in Ukraine and found that of 450 foreign-made electronic components, 317 were made by US companies. IStories uncovered several examples of these KRET-related parts in the public domain.

Radiopriborsnab and an eponymous clone

The chain of companies starts with a subsidiary of the Radiopriborsnab group located in Mytishchi, 19 kilometers northeast of Moscow. This is the department for purchasing electronic components for the KRET firms, which is how the company is named in all the documents. In 2021, the revenue of Radiopriborsnab from the sale of electronic components to KRET enterprises amounted to almost 10 billion roubles ($144.5 million). In 2022, the main buyers of Radiopriborsnab were Rostec companies – the Kaluga Research Radio Engineering Institute (under sanctions since 2019, manufactures the “Khibiny” electronic countermeasures system, which shields Russian planes from air defence systems), the Ekran Research Institute (the main developer of the “Vitebsk” directional IR countermeasure system) and the Ryazan Instrument Plant (manufacturer of avionics and radars).

Radiopriborsnab cannot directly access the market for foreign components due to sanctions. In 2017, another company with the same name – Radiopriborsnab – was registered at the same address in Mytishchi. 49.9 per cent of the firm is owned by the original Radiopriborsnab, and 49.9 per cent by another KRET entity. The director of the second Radiopriborsnab, Darya Khorkina, a lawyer at the original Radiopriborsnab, owns the remaining 0.2 per cent . IStories noted that the ownership structure formally removes the second Radiopriborsnab from the part of the sanctions, as none of the KRET structures have a controlling stake in the enterprise. In 2022, the original Radiopriborsnab purchased almost 17 billion roubles worth of components from its eponymous “clone” company.

Testkomplekt and a KRET manager's wife

Since a number of electronic components are subject to export control and American regulators wouldn’t allow the listing of a Russian defence contractor as an end buyer, the suppliers of the second Radiopriborsnab are companies not formally associated with KRET. The largest of these suppliers is Testkomplekt, which supplied 8.2 billion roubles ($118.4 million) worth of components to Radiopriborsnab in 2022. Some of these components were imported. Radiopriborsnab is not Testkomplekt's only customer; it also supplied Okeanpribor, which makes hydroacoustics for the Russian Navy, and the Baltic Shipyard Yantar, which builds warships.

Testkomplekt was founded by a Guzel Agzamova in 2016. IStories speculates that Agzamova is the wife of one of KRET's managers, Spartak Antikovich Haidarov. Up until 2021, Testkomplekt was registered at the same address as the main Radiopriborsnab, but is now located in an office next to Promtekhnosert, a KRET subsidiary. Spartak Haidarov is Promtekhnosert’s deputy director.

Two other companies supplied Radiopriborsnab with electronic parts worth almost 4 billion roubles ($57.8 million). Both of these companies also share the same name – VMK. One VMK is based in Saratov, while the other one is headquartered in Samara. Russia’s state registry has the firms under different names, but the Samara VMK shares the same phone with the former company of Dmitry Rebus, owner of the Saratov VMK.

Turkish and Chinese suppliers

The Russian firms that supply Radiopriborsnab with components do not import them directly from the manufacturer. Both VMKs have two suppliers abroad – one in Turkey and one in China.

The Chinese company, Tordan Industry Limited, belongs to Dmitry Rebus, director and owner of the Saratov-based VMK, while the Turkish Turkik Union And Dijital Teknoloji is run by Mustafa Cankat Aytek. The company’s website states that it manufactures and sells computers and other electronics, with random images published in the “Goods” section and random descriptions, such as a quote from Goethe's “The Sorrows of Young Werther.” The owner of the company and his deputy (his own brother) are the nephews of Atilla Aytek, the former intelligence chief of Turkey's General Directorate of Security.

Testkomplekt, meanwhile, has multiple Chinese suppliers, the largest of which is United Electronics Group Company Limited, owned by a man named Yuri Zhukov.

The people mentioned in the investigation refused to comment on the story, according to IStories.

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