NewsRussia taps Chinese market for high-end weapon production gear

Russia taps Chinese market for high-end weapon production gear

Russia imports machines for weapon production from China.
Russia imports machines for weapon production from China.
Images source: © Getty Images | Pavel_Chag

8:11 AM EDT, June 19, 2024

Russia is acquiring the necessary equipment to increase weapon production by sourcing high-end used Western machines from China through mysterious buyer networks. The British daily Financial Times reported on Wednesday that these machines have been sold in that market for over thirty years.

These operations were discovered by the Washington think tank Center for Advanced Defense Studies (C4ADS), which assessed that in light of these findings, Russia's claims of domestic production of precision equipment are probably "exaggerated." Allen Maggard, a C4ADS analyst leading the research, stated that Russian weapons manufacturers "are trying to expand their manufacturing capabilities by using whatever they can get."

As reported by "FT," one of the supply networks relies on AMG, a Russian military supplier that was sanctioned by the USA last year. Since the Russian invasion of Ukraine in 2022, AMG has increased its import of CNC machines, which are computer-controlled high-end machine tools, made by Japanese manufacturer Tsugami. CNC tools are essential in the defense industry as they enable automated, precise, and fast machining and milling of metal.

According to documents, AMG signed contracts to purchase machine tools for Kometa, which develops weapon systems for Russia, including ballistic missile defense systems, jet weapons, and rocket launchers.

Tsugami machines have been spotted in various military facilities. In March of this year, then-Russian Defense Minister Sergey Shoigu was shown on state TV at a factory in Altai that produces parts for cruise missiles next to a machine probably made by Tsugami.

Customs documents show that AMG bought Tsugami equipment in 2021 for about $600,000 from an official Japanese supplier. After the invasion of Ukraine, the purchase value increased, reaching $50 million in 2023, and the entire growth was attributed to two mysterious intermediaries.

The first is Amegino, a US-sanctioned supplier based in the United Arab Emirates whose website was initially hosted on Russian servers. According to Diligencia, a corporate intelligence firm, Amegino is owned by Andrey Mironov.

The second is ELE Technology, which falsely represents itself as a "branch of Gray Machinery Company," an American machine tool distributor. ELE Technology's website, which appears to be copied from the real Gray Machinery website, claims to have a warehouse in Illinois and offers prospective clients transportation from Chicago O'Hare airport. However, in reality, ELE Technology is based in Shenzhen, China.

Chinese companies defend themselves, but there are documents

Tsugami told "FT" that it did not directly supply any goods to ELE. According to ELE’s website, the company currently sells two used Tsugami machines that were manufactured in 2001 and 2005.

Just because a machine tool is two or three decades old doesn’t mean it can't produce simple weapon components, noted Maggard.

As "FT" explained, both enterprises play different roles in the Russian supply system. Amegino is a broker that commissions Chinese suppliers, such as ELE, to ship goods to Russia from China. Both companies have worked together: according to documents seen by C4ADS, Amegino organized for ELE to ship goods worth $2.7 million to Russia at the beginning of 2023.

Tsugami has relied on the Chinese market for about 20 years. One person associated with the company estimates that there are over 100,000 Tsugami machines in China out of 200,000 worldwide. This is the pool that Moscow has targeted since official Tsugami suppliers withdrew from Russia in 2022. In 2023, over 60% of Tsugami's sales were made in China.

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