Products of more than 250 Western companies were found in samples of destroyed or trophy Russian weapons. In total, in the first ten months of 2023, Western companies supplied critical components to Russia for a total of $2.9 billion. This was reported by the head of the President's Office, Andriy Yermak, on his Telegram channel, based on the results of new research by the McFaul-Yermak International Working Group on Sanctions against Russia, UNN reports.
According to the head of the OP, the McFaul-Yermak International Working Group on Sanctions Against Russia has developed new studies focusing on Russia's attempts to circumvent export control restrictions on military and dual-use goods and software. The first study, "Problems of Export Control Enforcement," prepared jointly with the Kyiv School of Economics, reveals the ways in which military and dual-use goods are supplied to Russia.
"The report examines nearly 2,800 foreign components found in Russian military equipment, as well as the companies responsible for their production. It is noted that in 2023, imports of military goods to Russia almost completely recovered after the introduction of restrictions and amounted to 90% of the volume before the full-scale invasion. On the other hand, imports of dual-use goods decreased by almost 29%, which is evidence of the success of export control measures when properly applied and enforced. Products of more than 250 Western companies were found in samples of destroyed or trophy Russian weapons. In the first ten months of 2023, Western companies supplied critical components to Russia totaling $2.9 billion. Imports of CNC machines to Russia in January-October 2023 increased by 33% compared to the pre-sanctions period and amounted to $292 million," said Andriy Yermak.
At the same time, he called for measures to be taken to ensure that export controls are ahead of Russian attempts to circumvent them. Such measures should take into account the specific challenges at different stages of the supply chain, and should also address gaps in export control policy, strengthen corporate responsibility, counteract third-party circumvention attempts, and strengthen institutions and international cooperation.
The second study, "How to Identify and Exploit the Kremlin's Weaknesses in Computer Networks and Software," analyzes the use of Western software by Russia for critical systems in the military, energy and financial sectors, as well as in the development of artificial intelligence and the use of cloud technologies.
"Russia's military-industrial complex relies heavily on interconnected software systems built on Red Hat Linux. The Neutrino, Alt 8 SP, and Astra Linux systems were also created with the participation of Western companies. Russian energy companies rely heavily on Western software to estimate deposits in natural resource fields. Key systems include Roxar RMS, Paradigm, Landmark Engineer's Desktop, and STARS. Despite the sanctions, these software packages are available through local representatives and intermediaries. Rosneft and Gazprom, both of which are subject to Western sanctions, are among the main users of this software. Russian banks continue to use software products manufactured by Oracle and Microsoft. Problems with the use of SAS and IBM systems are pushing financial institutions to look for alternative software products, such as Digital Q.Reporting and Polymatica. Thus, ineffective import substitution in the financial sector opens a window for potentially successful sanctions restrictions. Dependence on VMware and Citrix software encourages Russian institutions to use their own alternatives, which have problems with functionality and reliability," said the head of the OP.
Based on the results of the second study, the Group's experts recommend imposing sanctions against Russian developers and support for Russian software products by contractors from partner countries, including holding such companies liable for violating KYC (know your client) principles. Other proposed restrictions include demands to stop financial transactions with Russian companies, to ban the participation of Western companies in joint developments, and to create a separate database of alternative software used by Russia.
Optional
Oleksandr Ruvin, Director of the Kyiv Scientific Research Institute of Forensic Expertise, previously reported that foreign partners are constantly asking which countries the components are from in order to take appropriate measures.
"They take this painfully. They are interested in which company, whose production, when the component was produced, because in many cases the Russians erase the numbers, erase the manufacturers. And we have to use special methods that we have to conduct examinations," Ruvin said.
Also, according to the director of KFI, these components are critical for production, and therefore the enemy is trying to conceal their origin in every way possible.
"Previously, we also saw attempts to disguise manufacturers on certain parts, but now more attention is being paid to this work on purpose. Laser obliteration of markings on microelectronics is one of the surface treatment methods. This process uses a laser to remove or modify the top layer of a material, which results in a change in the marking or image on the surface. But they definitely spend more time on this, so it is likely that these components are critical for the enemy," Ruvin noted.