A Turkish import-export trading company is selling computer numerical control (CNC) machines to Russian businesses that it has obtained from various manufacturers and distributors based in Japan, Germany, Australia and elsewhere, despite restrictive measures to curb the export of such critical products to Russia.
The Türkiye-based company, Cncform Group, has been acquiring CNC machines from the subsidiaries of several global manufacturers as recently as October 2023.
According to trade and customs data, Cncform Group ships the CNC machines and tools it obtains to Russian importers, including those tied to sanctioned aviation companies and Russian military end users. Russian aviation companies are major users of imported CNC machines, according to a November 2023 report published by the Economic Security Council of Ukraine.
CNC machines are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing for machining metal materials or plastic. They have been reported to be critical to Russia’s military production. U.S. lawmakers have also recently called for tighter enforcement on the export of CNC machines to Russia.
Cncform Group was founded in July 2022, five months after Russia’s invasion of Ukraine.
These findings come as the Biden administration introduced an executive order that gives the U.S. government the authority to impose sanctions on financial institutions that help Russia evade sanctions.
More specifically, the order authorizes the U.S. Department of the Treasury to target foreign financial institutions found to have facilitated significant transactions involving Russia’s military industrial base, “including the sale, supply, or transfer of certain critical items.”
In conjunction with the announcement of the executive order, the Treasury released new guidance to financial institutions highlighting ways that Russia continues to evade sanctions and export controls to acquire “specified items” that it deems critical to Russia’s military. CNC machine tools were among the items listed as “critical.”
“As a result of our restrictions, Russia has increasingly shifted certain trade and financial flows through third countries to evade sanctions and continue its procurement of critical items for their wartime production,” said Treasury Secretary Janet Yellen in a December statement.
“We expect financial institutions will undertake every effort to ensure that they are not witting or unwitting facilitators of circumvention and evasion,” she added.
The Türkiye-based company, Cncform Group, has been acquiring CNC machines from the subsidiaries of several global manufacturers as recently as October 2023.
According to trade and customs data, Cncform Group ships the CNC machines and tools it obtains to Russian importers, including those tied to sanctioned aviation companies and Russian military end users. Russian aviation companies are major users of imported CNC machines, according to a November 2023 report published by the Economic Security Council of Ukraine.
CNC machines are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing for machining metal materials or plastic. They have been reported to be critical to Russia’s military production. U.S. lawmakers have also recently called for tighter enforcement on the export of CNC machines to Russia.
Cncform Group was founded in July 2022, five months after Russia’s invasion of Ukraine.
These findings come as the Biden administration introduced an executive order that gives the U.S. government the authority to impose sanctions on financial institutions that help Russia evade sanctions.
More specifically, the order authorizes the U.S. Department of the Treasury to target foreign financial institutions found to have facilitated significant transactions involving Russia’s military industrial base, “including the sale, supply, or transfer of certain critical items.”
In conjunction with the announcement of the executive order, the Treasury released new guidance to financial institutions highlighting ways that Russia continues to evade sanctions and export controls to acquire “specified items” that it deems critical to Russia’s military. CNC machine tools were among the items listed as “critical.”
“As a result of our restrictions, Russia has increasingly shifted certain trade and financial flows through third countries to evade sanctions and continue its procurement of critical items for their wartime production,” said Treasury Secretary Janet Yellen in a December statement.
“We expect financial institutions will undertake every effort to ensure that they are not witting or unwitting facilitators of circumvention and evasion,” she added.
Kharon users can explore the network and supply chain of Cncform Group in Kharon Clearview. Click here to view.
