Eurasia Press & News
The US, the European Union, and the UK face two major challenges when imposing sanctions on Russian military production. First, it’s not always clear which products are being imported specifically for the military. Second, a sanctioned company quickly grows into a new one, and the military-industrial complex struggles to adapt while new restrictions are being introduced. But there is a solution. After reviewing domestic supply data and comparing it with customs data, The Insider identified over 300 companies making purchases specifically for the military-industrial complex. Adding all of them to sanctions lists simultaneously could seriously impact Russian military production.
How suppliers were established
Russian defense industry companies rarely import their own products. They typically use intermediaries to purchase raw materials, components, machinery, equipment, and spare parts. These intermediaries are primarily small and medium-sized companies that are wholly privately owned (unlike the defense industry, where the state traditionally holds a significant or controlling stake).
Such structures more easily bypass bureaucratic obstacles and have the resources to informally overcome Russian customs barriers. The fundamentally market-based nature of this sector, coupled with its high level of competition, is one of the main reasons for the resilience of the Russian defense industry.
The Insider regularly writes about specific brokering operations (for example, Greek smugglers or German factories ) and the structure of this foreign trade brokering 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 there. Only indirect evidence can lead one to conclude that the goods ultimately ended up at a military facility. This often becomes clear only after the fact, when Western components are discovered in the remains of missiles and drones used to fire at Ukraine.
However, the use of new methods allowed The Insider to reconstruct such chains on a large scale for the first time.
Having obtained data on domestic market transactions (for the sake of the investigation, we are not disclosing the source of the data) and comparing it with customs data, The Insider analyzed which foreign trade participants concluded deals with leading defense industry enterprises (we classified approximately 160 key defense industry enterprises as such) in 2024.
The 160 companies selected represent a significant portion of the military-industrial complex, but the actual number of intermediaries is much larger. The Insider’s analysis only scratches the surface, but this is just the beginning of the investigation.
According to customs data, approximately 10,000 Russian companies imported sanctioned goods worth over $22 billion in 2024. Of these, over 2,000 companies were contractors of leading defense industry companies. According to data obtained by The Insider, these contractors made direct deliveries to leading defense industry companies worth over 80 billion rubles, or approximately $1 billion.
The total volume of sanctioned goods imported into the country by defense industry contractors exceeds $5 billion (only shipments valued over $20,000 are included). However, not all products are necessarily consumed by the military-industrial complex—a significant portion is also in demand in the civilian sector.
Moreover, supplies often don’t take shortcuts, but rather go through a network of intermediaries. Thus, among the leading defense industry enterprises studied by The Insider, only slightly more than half deal directly with importers of sanctioned goods.
Irreplaceable
A significant portion of the sanctioned components cannot be replaced with analogues; their absence would be critical for Russia’s defense industry.
For example, Japanese laser plasma-chemical etching systems from SMC Corporation are in demand in domestic electronics manufactured in Zelenograd and installed in military products where Chinese equipment is unavailable. In 2024, JSC Contract Holding imported such a system for the well-known Russian microchip manufacturer JSC Mikron, a military supplier under sanctions. Microchips are needed in virtually every modern weapon.
FPGAs are vital for military equipment —they are the “brains” of any system whose navigation is based on terrain recognition. They are used, for example, in several modifications of the Geranium drone. Uniserv LLC imported FPGAs from Xilinx to Russia in 2024 for the military. It supplied goods to drone manufacturer STC LLC , which is subject to sanctions.
Measuring machine sensors are used in the military industry for precision manufacturing of components. Such sensors from the British company Renishaw, whose products are world market leaders in quality, were imported in 2024 by Intratool Group LLC, which traded with the sanctioned engine manufacturer PJSC UEC Saturn.
The tip of the import iceberg
Even a single transaction between an importer of sanctioned goods and a military plant is a red flag that requires closer scrutiny of all parties involved. However, to exclude extremely minor transactions, The Insider selected only those importers and counterparties of leading defense industry companies that supplied military plants with goods worth more than 1 million rubles. More than 300 such importers were identified. Their deliveries to leading defense industry plants totaled 11 billion rubles, while their imports amounted to approximately $2 billion.
Thus, the imports of Rustakt , a drone manufacturer and importer of lithium-ion batteries for drones, amounted to 30 billion rubles. The company concluded deals with the military-industrial complex, confirmed by The Insider, worth 13 million rubles.
A number of companies import milling and turning machines, some of which are supplied to the military-industrial complex. These include Mir Stanochnika, iMashin Technology, AMG, Promservis, and the Baltic Industrial Company. The Insider has previously reported on some of these companies’ cooperation with the military-industrial complex .
It’s clear that defense industry companies are currently in the greatest need to upgrade their metalworking machine tool fleets. The Insider was only able to confirm a limited number of deals. However, given the sector’s actual needs, the number is likely much higher.
It is the military-industrial complex that is now most in need of upgrading its fleet of metalworking machines.
High-precision oscilloscopes and signal generators are in demand in electronic warfare equipment. These are supplied by the Dipol Group (see details ). According to information obtained by The Insider, Dipol is a regular supplier to the military-industrial complex.
Old men, 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 purchase sanctioned goods directly, without intermediaries. These are fully or partially state-owned old factories—military-industrial complex manufacturers —that both conducted foreign trade activities and manufactured products that were then sold within the Russian military-industrial complex.
These include KRET , UEC , the Ural Optical and Mechanical Plant, the United Instrument Manufacturing Corporation, and the Kazan Helicopter Plant. Such arrangements (foreign economic activity combined with military-industrial production) are largely the exception. Military-industrial complex companies generally do not conduct business directly with foreign countries. This is difficult both because of the bureaucracy involved in large-scale production and because of the sanctions they are more or less subject to.
Due to bureaucracy and sanctions, military-industrial complex enterprises do not conduct business 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). These manufacturers are critical for the military-industrial complex, but the military-industrial complex is not for them, as they will always have ample civilian customers (construction workers, road builders, miners, and automakers).
Many of these enterprises are not subject to sanctions, despite their size and economic importance to Putin’s Russia. This is apparently a deliberate policy on the part of Western powers, who stand to lose more from rising prices for the goods produced by these giants than they stand to gain from a decline in their turnover.
The third group includes related companies that produce individual critical components, assemblies, or units for the military-industrial complex in Russia , but are significantly dependent on imported raw materials and components. This is the most interesting group of private importers doing business with the military-industrial complex. Examples of such companies and their products (listed in descending order of their trade volume with the military-industrial complex) are presented in the table below:
These subcontractors are mostly privately owned. They are flexible enough to import the parts and components they need themselves. However, they certainly take a risk by entering foreign markets, as they understand the potential for exposure. If they are subject to sanctions, they will have to find intermediaries for their foreign trade activities. With hundreds of employees, a complex property portfolio, licenses, and certificates, they cannot simply close their doors and reopen from scratch.
Finally, the fourth and largest group of importers are resellers , or classic intermediaries. These are typically privately held LLCs with a small number of employees. They specialize in wholesale trade in a fairly narrow sector—for example, metalworking, electronics, or measuring instruments.
Among the resellers are a few large retail chains whose clients include individuals and legal entities in the civilian sector, but they also receive orders from the military-industrial complex.
The largest group of resellers are suppliers of metalworking machine tools and spare parts for them. In addition to the aforementioned machine tool manufacturers, these include Unimatic, Ameka, Promarsenal Company, Rosmark-Stal JSC, Soyuz Engineering, Ipr Equipment, MT Machinery, STS Technology, Grant-Trade, and Inkor.
Resellers of electronics, circuit boards, microchips, radio components, connectors, telecommunications equipment, and industrial automation systems are less visible. This is partly because, in 2024, customs began concealing data on certain electronic components.
These include, for example, Trimix, Uniservice, Radiofid Systems, and Bee Pitron. Among them are both suppliers of finished foreign products (primarily Chinese) and companies that accept orders in Russia for the manufacture of electronics according to Russian specifications.
However, some resellers, such as Bee Pitron, also manufacture their own products, company representative Vasily Malyshev said at the Army 2024 forum. His company claimed to have developed an import-substituting optical signal converter for the military. However, claims that all communication line components are made from Russian components raise serious doubts.
Of particular interest are companies whose import turnover roughly matches their military-industrial complex transactions. These include, for example, the aforementioned “Bi Pitron,” which uses shell companies in Indonesia to supply wires and cables. The ratio of imports to transaction turnover, close to one, and the lack of public visibility of such companies (they typically lack brick-and-mortar stores or clear websites with catalogs), indicate that these companies are, in their purest form, shell companies for military factories.
Western countries have only partially added the largest importers and resellers involved in defense industry transactions to their sanctions lists. Medium- and small-scale resellers involved in defense industry transactions are generally not subject to sanctions at all.
Resellers import more than just Chinese equipment. Japanese machine tool manufacturer Tsugami traditionally remains the leader among “Western” brands. Besides Japan, Taiwan, Korea, and Switzerland are also the leading countries of origin.
