- Russia is securing second-hand production tech sought after by its defense industry, a think tank reported.
- Opaque firms in countries such as Turkey and China are helping deliver it to Russian contractors.
- Without them, Russian domestic manufacturers could not meet the industry's needs.
Despite the West's campaign to cut Moscow's war economy off from needed equipment, a network of obscure firms are helping Russia secure essential technology, a think tank reported.
According to the Center for Advanced Defense Studies, arms manufacturers in Russia have been able to source Western-made high-precision tools by buying from second-hand markets in countries still trading with the Kremlin, such as China, South Korea, and Turkey.
Specifically, these countries are neither the origin nor destination of the traded goods, but facilitate their shipment.
"Companies and individuals in these jurisdictions act as brokers, supplying [foreign-produced CNC machine tools] not only to Russian defense industry contractors but also to Russian subsidiaries of foreign machine tool firms that allegedly exited Russia after February 2022," analyst Al Maggard wrote.
While second-hand CNC — or computer numerical control machine tools — may not be as sophisticated as current models, they're enough to keep fueling Moscow's military needs, Maggard said.
Without the help of these markets, Russian domestic manufacturers would be unlikely to meet the industry's requirements in the short-to-medium term, he noted.
Though the report said its findings just scratched the surface of these trade networks, it highlighted a number of case studies in which opaque firms helped deliver CNC tools to Russia.
One of these, verified by the Financial Times, centers around a Chinese-based reseller called ELE Technology, whose website was registered shortly after Moscow's 2022 invasion of Ukraine.
According to CADS, the firm made almost 100 shipments of Japanese CNC tools to a Russian defense contractor, possibly violating both US sanctions and Japanese export controls.
The contractor, AMG, has been sanctioned by the US since November 2023, the report said.
For its part, the West has been looking to restrain Russia's economy even further, with the US unleashing a new batch of sanctions on the country just this month. That includes an expanded ability to pursue secondary sanctions against financial institutions still facilitating trade with Moscow.