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Russian tank manufacturer bypasses sanctions with tech imports from Japan, Taiwan via China

Russian manufacturers of critical components for tanks are bypassing sanctions by obtaining components for precision instruments made in Japan and Taiwan through a Belarus-affiliated company in China, as reported in Nikkei.
UralVagonZavod Russian tank
A tank in a Russian UralVagonZavod factory. Credit: Rostec
Russian tank manufacturer bypasses sanctions with tech imports from Japan, Taiwan via China

Russian arms manufacturer has been importing components essential for tank production from Japan and Taiwan, despite ongoing sanctions due to Russia’s invasion of Ukraine, a Japanese Nikkei media outlet reported.

According to information obtained by Nikkei, a company connected to the Belarus government, an ally of Russia, was established in China after the invasion began in February 2022. This company has been facilitating the import of parts for the Russian arms maker, highlighting the ineffectiveness of sanctions targeting Russia’s munitions industry.

The data, provided by Belpol, a Belarus opposition organization, includes contracts and transaction records involving Russian, Belarusian, Chinese, and other companies. It reveals that Shenzhen 5G High-Tech Innovation, founded by a person linked to Belarusian President Aleksandr Lukashenko’s government, procured precision instrument parts such as motors and sensors needed for weapons production.

Shenzhen 5G has been purchasing parts from Japanese manufacturers like Metrol and Oriental Motor, and a leading machine tool maker in Aichi prefecture. These parts were then sent to Belarusian arms maker SALEO and LLC Laboratory of Additive Technologies, both under Lukashenko’s control. Notably, sensor parts made by Metrol were exported to Saleo for a significant sum in May 2023.

Uladzimir Zhyhar, a representative of Belpol, pointed out that SALEO and LLC use these components to manufacture key parts for Russian tanks, which are then sent to Russia’s UralVagonZavod for assembly into T-72 and T-90 tanks.

Both Metrol and Oriental Motor have stated that they do not engage in direct deals with Shenzhen 5G and are committed to adhering to export control laws. Shenzhen 5G and SALEO did not respond to Nikkei’s inquiries.

The report also highlights how LLC procured encoder disks from Attoptic, a Taiwanese precision instrument maker, which are used in the panoramic scopes of tanks. Despite attempts to remit payment being blocked by US sanctions, LLC eventually bypassed the sanctions by routing the payment through a financial institution in Georgia.

Taiwan’s International Trade Administration stated that their export restrictions are in line with those of the G7 countries, and the encoder disks and LLC Laboratory of Additive Technologies are not currently on the list of restricted exports. However, they are prepared to ban exports to LLC if it is added to the regulation list by international allies.

As per Nikkei, US and UK authorities are aware of Shenzhen 5G’s role in bypassing sanctions and may soon impose restrictions on the company. However, the challenge remains in shutting down all supply routes for restricted high-tech goods, as Russia is likely to set up other companies in third countries.

In January, an in-depth investigation by The Insider and Taiwanese outlet The Reporter revealed that Taiwan has become Russia’s primary source of precision metalworking machines since its invasion of Ukraine. Türkiye was noted as a prominent intermediary for imports of Western measuring equipment into Russia, another Insider investigation found.

For example, Türkish transit point data shows that as of September, Taiwanese metalworking machines accounted for the largest share of machine tool imports being moved to Russia along the Türkish route. Overall, the total value of Taiwan’s machining exports to Türkiye jumped 45% between January and October 2023 compared to 2022, making Türkiye the top official destination market, Insider reported.

According to the Taiwan Ministry of Economic Affairs, starting on 8 March, Taiwan will expand its export restrictions in response to Russia’s ongoing war in Ukraine. The country plans to add 77 items to its list of machine tools prohibited from being exported to Russia and Belarus, aligning with international sanctions.

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