Almost two years after the start of the war, Western components via hundreds of front companies continue to end up in the tanks and missiles with which Putin is terrorizing Ukraine. The EU arms embargo is failing: the Russian secret services are playing cat and mouse with Europe.
The cruise missile that hit an apartment block in the small Ukrainian town of Uman on April 28 was little different from the thousands of other missiles that Vladimir Putin has used to target the country’s civilian infrastructure since the start of his invasion of Ukraine. The wave of attacks with nearly two dozen missiles fired by strategic bombers over the Caspian Sea killed 23 people, according to Ukrainian sources. In their beds at dawn, including four children.
However, the Kh-101 flying bomb, NATO codename “Kodiak”, which leveled part of the nine-story building hundreds of kilometers behind the front with 450 kilograms of explosives that morning, could not have hit its target without a crucial component. According to research by “FAS,” the chips in the on-board computer that guided the deadly cargo to its destination did not come from a Russian weapons factory. But from the German manufacturer Infineon. At the request of “FAS”, Infineon boss Jochen Hanebeck regretted that some of his chips could have ended up in Russia despite sanctions. However, his company can’t do anything about it: Immediately after Putin’s attack, they left the Russian market – and today’s supply chains cannot be fully understood.
The Russian military repeatedly hits power plants, shopping centers and residential buildings in Ukraine with such weapons. And almost two years after Putin’s attack, the country’s civilian population continues to be terrorized with the help of American, European and German high technology. Despite countless rounds of sanctions, microchips and other dual-use goods from Western production continue to enter Putin’s empire unhindered. Without this steady supply of critical components, the Russian war machine could not deliver the tanks, cruise missiles and drones the Kremlin needs. If the West could cut off the delivery routes, the war would be over quickly. But Europe and the USA cannot find any real remedy against secret smuggling.
Rocket terror using Western high technology
“It’s all imported. Apart from the assembly, the markings and the serial numbers, there is nothing Russian here,” Deutsche Welle quoted the head of a Ukrainian military unit that shot down the components in an article referring to the “Kodiak” on-board computer Russian missiles analyzed. The Russians knew they were being watched, says the man, and had “started to file out the serial numbers from the chips” in order to conceal the delivery routes.
According to “FAZ” and the British think tank RUSI, the “Kodiak”, one of the most modern Russian cruise missiles, contains not only electronics from Infineon and its US subsidiary Cypress. But also an Intel processor and chipsets from Analog Devices, Texas Instruments and Xilinx. RUSI has identified a total of 450 Western components in the Kremlin’s most modern weapons – from cruise missiles to radar systems to navigation systems.
Western microchips have been indispensable for most Russian weapons since the Cold War. Instead of building up its own semiconductor industry, Russia made the strategic decision back in Soviet times to steal Western microchip technology and circumvent export controls through intermediaries – in effect smuggling in the components. The KGB even had a separate department for this – “Line X”. The importance that the procurement of Western components still has in Russian military doctrine is shown by one person: Sergei Chemezov, head of the largest Russian arms company Rostec, is an old companion of Vladimir Putin. In the 1980s they served together in the KGB office in Dresden.
In the first half of the year alone, Russia imported Western microchips worth more than $500 million, according to the independent Russian online media “Verstka”. The Russian investigative journalists evaluated secret Russian customs data. The majority of the components came from the US manufacturers Intel ($169 million), Analog Devices ($98 million) and Xilinx ($75 million), followed by Microchip Technology ($42 million) and Texas Instruments ($38 million) and Infineon ($28 million).
Russian agents are shopping in the middle of Europe
US companies and the German chip giant are the most important suppliers to the Russian defense industry in the middle of the war. According to the Kiev School of Economics, imports have almost returned to pre-war levels. Even if the direct sale of electronics to Russia is of course prohibited: Moscow easily circumvents the arms embargo through ex-Soviet republics such as Kazakhstan, Tajikistan and other third countries such as the United Arab Emirates. Hundreds of front companies are in business.
The vast majority of deliveries go through China. According to Verstka, the three largest importers of Intel chips are all based in Hong Kong. Of the 25 largest importers of microchips to Russia, 11 have direct supply relationships with defense companies. As long as manufacturers in Europe and the USA supply to non-sanctioned Chinese dealers, they are not violating the Western embargo. Many may not even know that their products end up in Russian drones and missiles. But this cannot be said about all Western companies.
“What is less noticed is how Russian procurement networks often target smaller, specialized firms in Europe to acquire high-end equipment that cannot easily be sourced elsewhere,” writes RUSI. Chip and special companies have been primary targets for Russian secret services since Soviet times. Nothing changed after the fall of the Berlin Wall. And especially not with the attack on Ukraine.
The secret services rarely succeed in thwarting the operations of Putin’s agents. The French businessman Marc R., for example, was head of the French semiconductor manufacturer Ommic until his indictment in March. Apparently his downfall was a photo taken on a yacht in the Mediterranean. According to the Financial Times, it shows a man who R. later claimed he only knew by his first name, “Maxim.” According to the newspaper R., Maxim Ermakov is said to have bought the special circuit boards from Ommic, which are installed in French tanks and fighter planes – for Istok, a subsidiary of the Russian arms company Rostec, which produces radar jamming devices.
Ommic is now closed, Maxim Ermakov is on the EU sanctions list and, according to Le Parisien, French prosecutors are investigating R. for “transferring procedures, documents or files to a foreign power that are likely to harm the fundamental interests of the nation“. Officially it is about suspicion of illegal exports, breach of trust and forgery of documents. According to the newspaper, R. is said to have developed various evasion strategies to deliver banned material to Moscow via China. In 2021, according to “FT”, R. is said to have flown to Greece to personally hand over 230 microchips worth 45,000 euros to “Maxim”. In total, the French investigators are said to have found invoices for 34,000 chips. R. denies all allegations.
German machines for Putin’s war machine
Not many managers put as much personal effort into keeping in touch with their Russian business partners as R. does. They are no longer just interested in Western microchips. Machine tool manufacturers have also been subject to the strictest controls since Putin’s invasion of Crimea. Since then, the precision systems that can be used to mill metal parts for weapons are no longer allowed to be exported to Russia.
Ulli S., until recently head of a machine tool company in Baden-Württemberg, apparently didn’t stop him. He has been in custody since August and was charged in October with allegedly supplying a Russian arms company with six systems for the production of sniper rifles worth 2 million euros. According to the federal prosecutor’s office, he is said to have concluded contracts for this in the spring of 2015 – a year after Moscow’s annexation of Crimea. The deliveries were concealed via a Russian company, a Swiss company and Lithuania. According to the investigators, Ulli S.’s company is even said to have trained employees of the Russian weapons company in how to use the German machines.
The fight against Russian smuggling routes has always been a cat-and-mouse game for the secret services: as soon as one network is uncovered, a new one is immediately created. Not just because Moscow needs the microchips at any price. But also because a global embargo would be too expensive: “You are actually prohibiting your own companies from making money,” the “FT” quotes a former US Security Council official. As long as the West is not prepared to pay a higher price and ban exports to China, Thailand or the Gulf Emirates, Russia’s agents will not stop buying up Western technology through middlemen. But in the process they just disappear deeper underground.