'Western parts found in Russian weapons in Ukraine' as firms warned on proper end-user due diligence

Mon 8 Aug 2022
Posted by: Phillip Adnett, Will Barns-Graham
Trade News

Russa-Ukraine Export controls sanctions due dilligence

Western-made components are continuing to be found in Russian weapons used on the battlefield in Ukraine, according to a new report.

New research from the Royal United Services Institute (RUSI) shows that the Russian military remains heavily dependent on Western-made equipment to continue its war efforts in Ukraine.

On-the-ground research

RUSI conducted on-the-ground research in Ukraine, examining 27 of Russia’s most modern military systems and discovering at least 450 different kinds of foreign-made components being used in them – around 80 of which are subject to export controls.

The majority of these components came from the US, with the remainder coming from countries such as Japan, Switzerland and the Netherlands.

Only five components made in the UK were discovered inside the recovered weapons, according to the Telegraph.

Unwitting companies

“Much of Russia’s procurement of Western microelectronics for military purposes involved the use of false end-user certificates, front companies and trans-shipments,” the report asserts. 

The IOE&IT's Daily Update reported on previous RUSI warnings about supply-chain due diligence in May this year, following the discovery of ‘dual use’ items from the west in Russian military gear abandoned on the battlefield.

A full, up-to-date HM Government list of export restrictions applying to UK companies when trading with Russia can be found here

Internal investigations

The report emphasises that “third-country trans-shipment hubs and clandestine networks operated by Russia’s special services” are being used to circumvent sanctions and export controls.

Several manufacturers have told Reuters that they have started internal investigations after the news agency provided customs data showing thousands of recent shipments to Russia carrying their products to third-party sellers.

Recommendations

According to the Times, one of the recommendations of the report was that the government review and strengthen existing export controls, as well as take measures against the clandestine supply chains.

"The time to act is now," says the Rusi report. “The degradation in Russian military capability could be made permanent if appropriate policies are implemented.”

Due diligence key

Speaking to the IOE&IT Daily Update today (8 August), Roger Arthey, chair of the IOE&IT’s Export Control Profession, said that parts may not have been deliberately sold by western-based companies to Russia, but could have been re-exported from a third country.

“This demonstrates the importance of exporting companies and organisations knowing about export controls, understanding how they apply to their business, and having robust systems in place for ensuring compliance,” he said.

"One of the key elements of an export control system, or an Internal Compliance Programme, is having a way of identifying 'red flags'. These may be suspicious enquiries or purchases," he added.

Arthey said that firms should consider making use of the IOE&IT's training and consultancy support around export controls.