A Chinese company that is traded on the Shanghai Stock Exchange has been supplying computer numerical control (CNC) tool parts to a Russia-based firm whose customers and business partners include several Russian entities sanctioned by G7 countries for supporting Russia’s military industrial base.
CNC machine tools, which have been crucial to Russia’s military production, are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing, particularly for machining metal materials or plastic. The tools are listed on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Common High Priority List, which identifies items of significant concern due to their potential use in military applications.
According to corporate disclosures, OKE Precision Cutting Tools has been procuring key components found in CNC machines from companies based in South Korea, Switzerland, and China.
For instance, OKE disclosed that it procured various types of robots from a South Korean company, and also bought certain pressing tools from a Swiss firm. The contracts were still ongoing as of June 2022, and the products are worth millions of euros.
OKE also procured cobalt powder and the chemical compound tungsten carbide from China-based companies, including subsidiaries of a German tungsten supplier and a publicly traded Chinese conglomerate.
According to trade data, OKE supplied Russia-based Dominik OOO, an industrial cutting machine supplier, with various CNC tool parts and other components containing carbide materials worth about $10 million over the past several years. The Russian company was OKE’s biggest customer in 2023 and the source of nearly 5 percent of all of OKE’s sales that year, corporate disclosures show.
In May 2023, OKE announced that it signed a new contract worth RMB 150 million ($20.7 million) to sell cutting tools, drill bodies, and carbide components to an unnamed Russian customer through 2024.
According to the companies’ websites, OKE and Dominik have been business partners since 2016.
Dominik’s customers and partners include several Russian industrial companies that have been sanctioned for their roles in supporting Russia's military, including for manufacturing weapons and rocket launchers used against Ukraine.
CNC machine tools, which have been crucial to Russia’s military production, are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing, particularly for machining metal materials or plastic. The tools are listed on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Common High Priority List, which identifies items of significant concern due to their potential use in military applications.
According to corporate disclosures, OKE Precision Cutting Tools has been procuring key components found in CNC machines from companies based in South Korea, Switzerland, and China.
For instance, OKE disclosed that it procured various types of robots from a South Korean company, and also bought certain pressing tools from a Swiss firm. The contracts were still ongoing as of June 2022, and the products are worth millions of euros.
OKE also procured cobalt powder and the chemical compound tungsten carbide from China-based companies, including subsidiaries of a German tungsten supplier and a publicly traded Chinese conglomerate.
According to trade data, OKE supplied Russia-based Dominik OOO, an industrial cutting machine supplier, with various CNC tool parts and other components containing carbide materials worth about $10 million over the past several years. The Russian company was OKE’s biggest customer in 2023 and the source of nearly 5 percent of all of OKE’s sales that year, corporate disclosures show.
In May 2023, OKE announced that it signed a new contract worth RMB 150 million ($20.7 million) to sell cutting tools, drill bodies, and carbide components to an unnamed Russian customer through 2024.
According to the companies’ websites, OKE and Dominik have been business partners since 2016.
Dominik’s customers and partners include several Russian industrial companies that have been sanctioned for their roles in supporting Russia's military, including for manufacturing weapons and rocket launchers used against Ukraine.
Kharon users can explore the network and supply chain of OKE and Dominik in Kharon ClearView. Click here to view.
The trade between the two companies comes as G7 leaders are calling on China to stop providing dual-use items to Russia. During their annual summit held last week in Italy, the leaders said that China was “enabling” Russia’s war in Ukraine with its “ongoing support for Russia’s defense industrial base.”
“We call on China to cease the transfer of dual-use materials, including weapons components and equipment, that are inputs for Russia’s defense sector,” the leaders said in a communiqué.
In February, the U.S., U.K., EU, and Japan added CNC machine tools to their list of common high priority items in an effort to stop those items from heading to Russia.
Last year, U.S. lawmakers sent a letter to the Biden administration urging it to restrict the export of CNC machines to Russia.
The lawmakers highlighted the significant role CNC machines play in Russia’s military production, and expressed concern that Russia relies on exports from manufacturers and intermediaries in other countries to meet its needs.
“Reports suggest a troubling trend in which German, Italian, Japanese, Korean, Taiwanese, Swiss, and even U.S.-produced machine tools and key components are still making their way to Russia, often through intermediaries, but sometimes directly,” the lawmakers said in the letter.
Kharon also previously reported on a Turkish import-export trading company that serves as an intermediary supplier of CNC machines to Russian businesses.
“We call on China to cease the transfer of dual-use materials, including weapons components and equipment, that are inputs for Russia’s defense sector,” the leaders said in a communiqué.
In February, the U.S., U.K., EU, and Japan added CNC machine tools to their list of common high priority items in an effort to stop those items from heading to Russia.
Last year, U.S. lawmakers sent a letter to the Biden administration urging it to restrict the export of CNC machines to Russia.
The lawmakers highlighted the significant role CNC machines play in Russia’s military production, and expressed concern that Russia relies on exports from manufacturers and intermediaries in other countries to meet its needs.
“Reports suggest a troubling trend in which German, Italian, Japanese, Korean, Taiwanese, Swiss, and even U.S.-produced machine tools and key components are still making their way to Russia, often through intermediaries, but sometimes directly,” the lawmakers said in the letter.
Kharon also previously reported on a Turkish import-export trading company that serves as an intermediary supplier of CNC machines to Russian businesses.
