On February 22, the American NGO and investigative group C4ADS (Center for Advanced Defense Studies) published the results of an investigation into the re-export of European CNC machines to Russia via Turkey.
In their analysis, C4ADS examined detailed customs data from Turkey and Russia, along with numerous European corporate registries. They described the circumvention schemes used to supply CNC machines for the needs of Russia's military-industrial complex (MIC). The schemes involve European manufacturers, their subsidiaries, and front companies, as well as distributors and weapon producers within Russia.
C4ADS, a longstanding partner of the Economic Security Council of Ukraine (ESCU), is one of the foremost experts on the Russian MIC's access to foreign industrial equipment, especially CNC machines. In their investigation, they reference the ESC report on Russia's dependence on high-precision industrial equipment and data on the internal transactions of Russian companies involved in circumvention schemes.
Unfortunately, despite numerous sanctions, trade restrictions, and efforts by the Turkish authorities to stop transit to Russia, the country remains one of the most powerful sources of dual-use goods for the Russian military machine, and some European manufacturers are trying to maintain exports to Russia and build workarounds.
As the tools needed for the Russian military-industrial complex become more complex, the supply chains become increasingly convoluted. In these chains, anywhere from 5 to 7 companies from three countries may be involved, making tracking shipments challenging. However, importation into Russia becomes more complex and expensive. Nonetheless, methods to enhance control over such supply chains still exist: more systematic sanctions against intermediaries, stricter and broader export controls, new approaches to corporate compliance, and due diligence.
