The U.S. and the EU are calling for increased enforcement on the export of advanced machine tools to Russia, which are critical for the production of military equipment and weapons systems used in its war against Ukraine.
Last month, a group of bipartisan U.S. lawmakers sent a letter to the Biden administration urging it to restrict the export of advanced machine tools, particularly Computer numerical control (CNC) machines to Russia.
CNC machines are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing for machining metal materials or plastic.
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,” they added.
Stan LLC, a Russian company that manufactures metal-working equipment, is one of several firms that was sanctioned by the U.S. “for operating or having operated in the manufacturing sector of the Russian Federation economy.”
Stan has sold CNC machines to three sanctioned Russian state-owned companies in the aerospace industry, including the United Aircraft Corporation – one of Russia’s key enterprises involved in the development, production, and repair of military aircraft, Kharon found.
Russian high-end machinery users were using supplier networks in Turkiye and former Soviet countries suspected of acting as intermediaries for Moscow to acquire European-manufactured items.
In September, Ukraine’s anti-corruption agency, the National Agency on Corruption Prevention (NACP), called on German authorities to halt the sale of high-precision machine tools to Russia, Bloomberg reported.
The NACP also added two major German manufacturers of CNC machines to its list of international sponsors of war, according to its website. The agency said the firms have been exporting CNC machines to Russian companies, at times through facilitators abroad.
“[Russia] actively uses intermediary companies to purchase and deliver strategically important machine tools… to continue the war,” the NACP said.
Other European manufactured CNC machines, including from Italy and Switzerland, have been exported through intermediary channels to Russia.
In one example, Kharon review of trade and procurement data found that a Swiss machine tools company, Tornos SA, shipped over $1 million worth of CNC machines and parts to two Turkish companies in 2023, which were then sold to Russian companies tied to military end users.
“Enhancing export control compliance and enforcement is crucial to undermining the Russian defense industrial base and supporting the Ukrainian people as they push back against Putin’s illegal war of aggression,” the lawmakers said.
The European Union is also planning to strengthen its enforcement by proposing a ban on the export of machine tools to Russia, Bloomberg reported.
The proposal is part of the EU’s 12th sanctions package, which includes a ban on Russian diamonds and tightening restrictions on the export of oil to prevent Russia from circumventing EU sanctions.
Last month, a group of bipartisan U.S. lawmakers sent a letter to the Biden administration urging it to restrict the export of advanced machine tools, particularly Computer numerical control (CNC) machines to Russia.
CNC machines are computer-controlled tools used for precise cutting, shaping, and engraving in manufacturing for machining metal materials or plastic.
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,” they added.
Procurement Agents Abroad
The U.S. Department of the Treasury imposed its own sanctions last month on Russian metal companies and importers of CNC machines.Stan LLC, a Russian company that manufactures metal-working equipment, is one of several firms that was sanctioned by the U.S. “for operating or having operated in the manufacturing sector of the Russian Federation economy.”
Stan has sold CNC machines to three sanctioned Russian state-owned companies in the aerospace industry, including the United Aircraft Corporation – one of Russia’s key enterprises involved in the development, production, and repair of military aircraft, Kharon found.
Russian high-end machinery users were using supplier networks in Turkiye and former Soviet countries suspected of acting as intermediaries for Moscow to acquire European-manufactured items.
In September, Ukraine’s anti-corruption agency, the National Agency on Corruption Prevention (NACP), called on German authorities to halt the sale of high-precision machine tools to Russia, Bloomberg reported.
The NACP also added two major German manufacturers of CNC machines to its list of international sponsors of war, according to its website. The agency said the firms have been exporting CNC machines to Russian companies, at times through facilitators abroad.
“[Russia] actively uses intermediary companies to purchase and deliver strategically important machine tools… to continue the war,” the NACP said.
Other European manufactured CNC machines, including from Italy and Switzerland, have been exported through intermediary channels to Russia.
In one example, Kharon review of trade and procurement data found that a Swiss machine tools company, Tornos SA, shipped over $1 million worth of CNC machines and parts to two Turkish companies in 2023, which were then sold to Russian companies tied to military end users.
Calls for Enforcement
U.S. lawmakers have urged the Biden administration to work with companies and allied governments to prioritize export control compliance and enforcement.“Enhancing export control compliance and enforcement is crucial to undermining the Russian defense industrial base and supporting the Ukrainian people as they push back against Putin’s illegal war of aggression,” the lawmakers said.
The European Union is also planning to strengthen its enforcement by proposing a ban on the export of machine tools to Russia, Bloomberg reported.
The proposal is part of the EU’s 12th sanctions package, which includes a ban on Russian diamonds and tightening restrictions on the export of oil to prevent Russia from circumventing EU sanctions.
