This article from Reuters reveals that a Russian state-owned explosives manufacturer, the Biysk Oleum Factory (BOZ), has circumvented Western sanctions by purchasing equipment from Siemens via Chinese middlemen. The factory, which produces TNT and HMX explosives, is owned by the Russian state and fulfills defense orders for the Russian defense ministry.
The article highlights how Russia’s defense manufacturers have been able to avoid Western sanctions by sourcing Western-made equipment from wholesalers and re-sellers in China. This loophole has allowed Russia to sustain its war against Ukraine despite international efforts to isolate it economically.
Specifically, the article reports that BOZ bought Siemens equipment through two Chinese companies: Huizhou Funtai Technology Co., Ltd (Huizhou) and New Source Automation Co., Ltd (New Source). These companies have been able to source as many products from Siemens as they need without being asked about the end-user. The article also notes that neither of these companies responded to Reuters’ written requests for comment.
Siemens, in response to the article, said it asks all its clients to comply with Western sanctions but did not directly respond to a question about whether Huizhou is a partner company. The company also stated that it would immediately investigate any indications of contravention of sanctions and involve the appropriate authorities.
The European Union has moved to close this loophole by imposing fully-fledged sanctions on Chinese entities for supplying components to Russian defense firms. However, the article suggests that more work remains to be done to prevent Russia from sourcing equipment through other means.
Overall, the article provides a detailed look at how Russia’s defense manufacturers have been able to maintain their production capabilities despite Western sanctions, and highlights the need for continued international efforts to isolate Russia economically.
