Who supplies Russia with a killer drones
2022.12.15 07:19
Who supplies Russia with a killer drones
Budrigannews.com – An adaptable, sanctions-evading supply chain that frequently passes through a drab office above a Hong Kong market and occasionally through a yellow stucco home in suburban Florida is the source of the hundreds of Russian drones that are looming ominously over the Ukrainian battlefield.
According to Ukrainian commanders, the “Sea Eagle” Orlan 10 UAV is a deceptive, low-tech, and inexpensive weapon that has directed many of the up to 20,000 artillery shells that Russia has fired daily on Ukrainian positions in 2022, killing up to 100 soldiers per day.
A logistical trail that begins at Orlan’s production line, the Special Technology Centre in St. Petersburg, Russia, and ends at the Royal United Services Institute, a defense think tank in London, has been discovered through an investigation by Reuters and iStories.
The investigation marks the first time a supply route for American technology has been traced all the way to a Russian manufacturer, whose weapon system is used in Ukraine, based on bank records and customs filings from Russia.
After President Barack Obama stated that it had collaborated with Russian military intelligence to attempt to influence the U.S. presidential election in 2016, the Special Technology Centre, which previously produced a variety of surveillance devices for the Russian government and now focuses on drones for the military, was the initial target of U.S. sanctions.
Any American citizen, resident, or business was prohibited from supplying anything that could end up with the Special Technology Centre under the sanctions, which went into effect in 2017. In March of this year, the United States government tightened those restrictions by effectively banning all sales of high-tech items to Russia, including communications and navigation equipment, microchips, and American products, to any military end user.
The production of the Orlan drone has not been halted by any of that.
A written request for comment was not met by the Special Technology Centre. However, in an interview with Reuters, a top scientist and major shareholder stated that the company was experiencing a “high demand” for its drones.
Reuters inquired about the Special Technology Centre’s relationship with the Ministry of Defense of Russia but received no response.
The U.S. Department of Commerce, which regulates technology exports from the United States, declined to comment on its knowledge of the Special Technology Centre or the parts from the United States that Russia uses in its drone program.
A Commerce spokesperson told Reuters that the department cannot discuss the existence or absence of investigations. The spokesperson continued, We won’t hesitate to make use of every tool at our disposal to thwart those who want to help Putin’s war machine.”
Asia Pacific Links Ltd., a Hong Kong-based exporter, has been one of Russia’s most important suppliers to the drone program. According to Russian customs and financial records, the company provided millions of dollars worth of parts, but never directly. Many of the components are microchips made in the United States.
According to these customs records, the majority of Asia Pacific’s exports to Russia were delivered to a single importer in St. Petersburg who had close ties to the Special Technology Centre. The import organization, SMT iLogic, shares a location with the robot producer and has various different associations.
According to his LinkedIn profile and other corporate filings, Asia Pacific’s owner, Anton Trofimov, is an expatriate Russian who graduated from a Chinese university and has other business interests in China as well as a company in Toronto, Canada.
Trofimov lives in a modest Toronto neighborhood called East York, according to public records. Email and LinkedIn inquiries were not answered by him. The woman who answered the door said she was Trofimov’s wife and would send him a message telling him to call Reuters. He did not.
The area is a world away from Asia Pacific’s office in a ratty and tight place of business off a side back street and person on foot market in Hong Kong’s business locale.
When a journalist from Reuters recently visited, no one was present at the Hong Kong office. According to the building’s receptionist, the company shares a room with three other tenants that is partitioned off.
This year has seen a boom in business, despite appearances. According to Russian customs records, Asia Pacific significantly increased its business between March 1 and September 30 following Russia’s invasion of February. It exported parts valued at approximately $5.2 million, up from approximately $2.3 million during the same time period in 2021, making it iLogic’s largest supplier. The records also show that a lot of the parts were made by American tech companies.
During the same time period in 2022, Analog Devices (NASDAQ:) chips valued at $1.8 million were among the components that Asia Pacific sent to iLogic. Texas Instruments (NASDAQ:) raised $641,00. Xilinx (NASDAQ:), and $238,000. based on data from Russian customs. In addition, the supplies included Saito Seisakusho model aircraft engines, which are utilized in the Orlan 10, as depicted in photographs of recovered drones in Ukraine. Saito asserted that it was unaware of the deliveries.
Analog Devices did not respond to e-mail inquiries regarding recent shipments to Russia. Xilinx’s owners, Texas Instruments and AMD, claimed that their businesses were adhering to all U.S. export controls and sanctions and had not shipped directly into Russia in many months.
AMD added that in order to monitor the potential sale or diversion of AMD products into Russia or restricted regions, it requires its authorized distributors to implement end-use screening measures. AMD stated that SMT iLogic and Asia Pacific Links are not authorized distributors.
The Special Technology Centre relies on a number of suppliers, most notably iLogic, according to financial records reviewed by Reuters and provided by a Russian official. Reuters was able to inspect a record of iLogic’s own bank receipts and payments and discovered that the company works almost exclusively for the drone manufacturer.
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According to customs records, iLogic has brought about $70 million worth of mostly electronic goods into Russia since 2017. What’s more, as indicated by monetary records analyzed by iStories and Reuters, almost 80% of the organization’s pay is from its business with the Extraordinary Innovation Community.
In turn, the same financial records show that Russia’s Ministry of Defense is the Special Technology Centre’s biggest customer. Between February and August of this year, it received payments totaling nearly 6 billion rubles, or $99 million. All of the company’s bank transfers during that time period are listed in the records that were examined.
When contacted by phone, the Special Technology Centre’s top scientist and largest shareholder, Alexey Terentyev, stated that the war has necessitated concentrating on the production of drones.
“At this time, we do not have the resources to do anything else because of the high demand for Orlans. He stated, “The demand for it is much greater than our capacity to produce.”
He stated that despite the difficulties the company faced as a result of U.S. sanctions, it consistently located a global buyer for its necessities. “One of the world’s most powerful nations imposed sanctions on us,” Terentyev stated. This should make us happy.
Terentyev did not specify whether iLogic was one of those suppliers. He responded, “You ask me about a company I don’t know,” when asked about iLogic. He stated that if his name appeared in documents, it was “likely correct” that he was a shareholder, being reminded that he was listed as one of iLogic’s founders in Russian corporate records. He responded, “Yes, I remember something.” However, he was unable to recall what iLogic did. He stated, “I have lost contact with this company.”
According to those corporate records, the Special Technology Centre and iLogic share a St. Petersburg office address. According to corporate records in Russia, it was established by Terentyev and other senior drone manufacturer executives or their relatives.
The Special Technology Centre’s chief executive officer, Roman Agafonnikov, stated in a brief telephone interview that he had no knowledge of iLogic.
FLORIDA Another person who has supplied Russia’s drone program lives on the coast of southeast Florida in a sophisticated suburban house just behind a nature reserve.
According to Russian customs records, 41-year-old Igor Kazhdan owns a company called IK Tech. Between 2018 and 2021, he sold electronics worth approximately $2.2 million to Russia, with over 90% of those sales going to iLogic.
According to Russian customs records, between October 2020 and October 2021, IK Tech sold iLogic approximately 1,000 American-made circuit boards. This occurred at a time when federal law forbade the supply of any such technology to the Special Technology Centre, whether directly or through a third party.
Gumstix, a company based in California, produced the boards, which are estimated to be worth approximately $274,000. The California-based company told Reuters that it would conduct an investigation and was “very concerned” to learn of the shipments. “We will take all appropriate action to address any identified diversion of products from lawful end use,” it said, adding that it does not have Russian customers or products or services intended for Russia.
A Gumstix board that is nearly identical to the boards supplied by IK Tech can be seen in photographs of the inside of a captured drone taken by officials from Ukraine and seen by Reuters. The board is a component of the Orlan 10’s control unit, as indicated by a list of components found on another drone that the Ukrainian government provided to RUSI and Reuters.
Authorities in the United States became aware of Kazhdan’s activities. Kazhdan was detained by federal agents just two weeks before Russian tanks entered Ukraine and Orlan drones began buzzing overhead. He was later charged with 13 counts of selling electronic components to Russia between December 2021 and February 2022 and smuggling and evading export controls.
The indictment concerned the sale of sophisticated amplifiers manufactured by Qorvo (NASDAQ:) in the United States. that required Russia to obtain an export license. Court documents do not indicate whether U.S. authorities were aware of the products’ final destination. According to Ukrainian officials, the radio communication circuits of Orlan drones contain the Qorvo amplifiers, which are frequently utilized in radar, communications, and radio equipment. Qorvo stated in a statement to Reuters that a distributor in Florida was the “declared destination” of the parts mentioned in the case. It continued: The products of the company were exported and used without our knowledge, and Qorvo has never done business with IK Tech or Igor Kazhdan.
After Kazhdan pleaded guilty to two charges in November 2022, a federal judge gave him three years of probation, a $200 fine, and an order to forfeit approximately $7,000. Kazhdan could have been sentenced to 40 years in prison if found guilty on all counts.
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Kazhdan, dressed in shorts and a short-sleeve shirt and sporting a scruffy beard, said that his exports to Russia were small in comparison to those of other businesses when it was suggested that he might have been assisting Russia’s drone program. He was speaking on the doorstep of his Dania Beach, Florida, residence.
According to Kazhdan, “I just don’t think that whatever this is, it’s a big deal that you should be writing this story.” This is just hilarious.
He would not discuss the case or his shipments to Russia beyond that.
Kazhdan told the Southern Florida District Judge at his November 2022 sentencing hearing that he started doing business with Russia after meeting importers at a satellite conference in 2016. He claimed that the importers persuaded him to evade reporting and licensing requirements shortly thereafter.
The case was not discussed by the United States Department of Justice.
