Dec 15 (Reuters) – Hundreds of Russian drones have circled ominously over Ukrainian battlefields, thanks to a resilient, sanctions-evading supply chain that routinely passes through a road above the Hong Kong market. A seedy office, sometimes across a yellow stucco house in suburban Florida.
The Seahawk Orlan 10 drone is said to be a deceptive, relatively low-tech, and cheap killer that Russia is firing as many as 20,000 rounds a day into Ukrainian positions in 2022, killing as many as 100 soldiers a day. to the Ukrainian commander.
An investigation by Reuters and Russian outlet iStories in collaboration with the Royal United Services Institute, a London-based defense think tank, has uncovered a logistical thread that spans the globe and ends at the Orlan production line at the Special Technology Center in St. Petersburg. St. Petersburg, Russia.
The investigation marks the first time the supply route of U.S. technology has been traced to a Russian manufacturer whose weapons systems are used in Ukraine, according to Russian customs documents and bank records.
The Special Technology Center, which once made various surveillance equipment for the Russian government, is now focused on making drones for the military, after U.S. President Barack Obama said it worked with Russian military intelligence in an attempt to influence the 2016 U.S. presidential election.
The sanctions, which went into effect in 2017, prohibit any U.S. citizen or resident or U.S. company from supplying anything that might end up in a special technology center. In March, the U.S. government tightened those restrictions, banning the sale of any U.S. products to any military end-user and effectively banning sales of all high-tech products, such as microchips, communications and navigation equipment, to Russia.
None of this has stopped Orlan drones from being produced.
The Special Technology Center did not respond to a written request for comment. But a top scientist who is also a majority shareholder told Reuters in an interview that the company was experiencing “high demand” for its drones.
The Russian Ministry of Defense did not respond to Reuters questions about the impact of the sanctions and its relationship with the special technology center.
The Commerce Department, which controls U.S. technology exports, would not comment on its knowledge of special technology centers or U.S. components supplying Russia’s drone program.
In a statement to Reuters, a Commerce Department spokesman said the department could not comment on whether there was an investigation. “We will not hesitate to use all the tools at our disposal to thwart the efforts of those who seek to support Putin’s war machine,” the spokesman added.
One of the most important suppliers to Russia’s drone program is Hong Kong-based exporter Asia Pacific Links Ltd, which has provided parts worth millions of dollars, though never directly, according to Russian customs and financial records. Many of the parts are microchips from American manufacturers.
Asia-Pacific exports to Russia are mainly delivered to an importer in St. Petersburg. These customs records show that St. Petersburg has strong ties to the Special Technology Center. Import company SMT iLogic shares an address with the drone maker and has many other connections.
Asia Pacific owner Anton Trofimov is a Russian expatriate who graduated from a Chinese university, has other business interests in China, and other business interests in China, according to his LinkedIn profile and other company documents. Own a company in Toronto, Canada.
According to public records, Trofimov was a resident of a nondescript neighborhood in East York, Toronto. He did not respond to emailed and LinkedIn questions. A woman who answered the door identified herself as Trofimov’s wife and said she would pass on a message for him to contact Reuters. He never has.
The neighborhood is very different from Asia Pacific offices in a dilapidated narrow office building next to an alley and pedestrian market in Hong Kong’s business district.
When Reuters reporters visited the Hong Kong office recently, no one was there. The company shared a partitioned room with three other tenants, according to the building’s receptionist.
Despite appearances, business is booming this year. In the seven months from March 1 to Sept. 30, business in the Asia-Pacific region has soared since Russia’s February invasion, exporting parts worth about $5.2 million, up from about $2.3 million in the same period in 2021, it said. million dollars, becoming iLogic’s largest supplier. To Russian customs records. Records also show that many of the components were made by U.S. technology companies.
Of the parts sent to iLogic in the Asia-Pacific region during the same period in 2022, chips made by Analog Devices (ADI.O) were worth $1.8 million, Texas Instruments was worth $641,000 and Xilinx was worth $238,000, according to Russian media reports. Customs Data. The supplies also included model aircraft engines made by Japanese company Saito Seisakusho for use in the Orlan 10, as seen in photos of drones recovered in Ukraine. Saito said it had no knowledge of the shipments.
Analog Devices did not respond to emailed questions when asked about shipments to Russia in recent months. AMD (AMD.O), owner of Texas Instruments (TI) and Xilinx (Xilinx), said their companies had not shipped or approved shipments directly to Russia for months and complied with all U.S. sanctions and export control.
AMD added that it requires its authorized resellers to implement end-use screening measures to track the possible sale or diversion of AMD products to Russia or restricted territories. “SMT iLogic and Asia Pacific Links are not authorized AMD resellers,” AMD said.
supplier next door
Financial records provided by a Russian official and reviewed by Reuters show that the special technology center relies on a number of suppliers, but most notably iLogic. iLogic works almost exclusively for the drone maker, according to iLogic’s own bank records seen by Reuters.
Since 2017, iLogic has imported about $70 million worth of electronics into Russia, according to customs records. Nearly 80 percent of the company’s revenue comes from its business with special technology centers, according to financial documents reviewed by iStories and Reuters.
In turn, the same financial records show that the special technology center’s largest customer was the Russian Ministry of Defense, which paid it nearly 6 billion rubles ($99 million) between February and August this year. The records reviewed list all transfers to the company’s bank account during the period.
Alexey Terentyev, a top scientist and majority shareholder at the Special Technology Center who was reached by phone, said the war had forced it to focus on making drones.
“Because of the high demand for Orlans, we don’t have the resources to do anything else right now. The demand for it is far greater than our production capacity,” he said.
U.S. sanctions have caused problems for the company, but it can always find someone in the world to sell it to, he said. “One of the most powerful countries in the world imposed sanctions on us,” Terentyev said. “We should be proud of that.”
Terentyev declined to say whether iLogic was one of those suppliers. When asked about iLogic, he said, “You’re asking me about a company I don’t know.” Reminding that he was listed in Russian corporate records as one of iLogic’s founders, he said that if his name appeared on the documents, He is “probably right” to be a shareholder. “Yes, I remember one thing,” he said. But he doesn’t remember what iLogic did. “I lost touch with this company,” he said.
Those company records show that iLogic is located at the same St. Petersburg office address as the Special Technology Center. It was founded by Terentyev and other top executives at the drone maker or their relatives, Russian company records show.
In a brief phone interview, Special Technology Center CEO Roman Agafonnikov said he knew nothing about iLogic.
Florida
On the coast of southeast Florida, living in a handsome suburban house behind a nature preserve is another man who provides services to the Russian drone program.
Russian customs records show that Igor Kazhdan, a 41-year-old US-Russian citizen, owns a company called IK Tech, which sold about $2.2 million worth of electronics to Russia between 2018 and 2021, more than 90 percent of which were sold to iLogic.
Russian customs records show that IK Tech sold approximately 1,000 U.S.-made circuit boards to iLogic between October 2020 and October 2021, when federal law prohibited the supply of any such technology directly or through another company to the Special Technology Center .
The planks, valued at approximately $274,000, were made by California manufacturer Gumstix. The California company told Reuters it was “very concerned” to hear about the shipments and would investigate. The company said it has no customers in Russia and does not target any products or services in Russia, adding, “We will take all appropriate action to address any identified diversion of products from legitimate end uses.”
Photos of the drone’s interior taken by Ukrainian officials and seen by Reuters showed that the Gumstix circuit boards were nearly identical to those shipped by IK Tech. The board was part of the Orlan 10 control unit, according to a list of components found on another drone that the Ukrainian government provided to RUSI and Reuters.
Kajdan’s activities have attracted the attention of US authorities. Federal agents arrested Kazhdan just two weeks before Russian tanks rolled into Ukraine and Oran drones began buzzing overhead. He was later indicted on 13 counts of smuggling and evading export controls while selling electronic components to Russia between December 2021 and February 2022.
The indictment concerns the sale of precision amplifiers made by Qorvo in the US, which require an export license from Russia. Court documents are not clear on whether U.S. authorities knew the final destination of the products. According to Ukrainian officials, Qorvo amplifiers, often used in radar, communications and radio equipment, were found in the radio communication circuit of the Orlan drone. In a statement to Reuters, Qorvo said the “declared destination” of the parts named in the case was a distributor in Florida. “Qorvo has never conducted business or had any relationship with IK Tech or Igor Kazhdan, whose products were exported and used without our knowledge,” it added.
In November 2022, after Kazhdan pleaded guilty to two charges, a federal judge sentenced him to three years of probation, fined him $200 and ordered him to forfeit about $7,000. If convicted on all counts, Kajdan could face 40 years in prison.
Kazhdan, wearing shorts and a short-sleeved shirt and sporting a scruffy beard, said on the doorstep of his Dania Beach, Fla., home that his exports to Russia are tiny compared to other companies because he may have been assisting Russian companies. Drone program.
“I just don’t think it’s a big deal that whatever it is, you should write the story,” Kazdan said. “This is ridiculous.”
Beyond that, he won’t talk about the case or his shipment to Russia.
During his sentencing hearing in November 2022, Kazhdan told a South Florida district judge that he began doing business with Russia after contacting the importer at a 2016 satellite conference. Soon after, the importer convinced him to bypass the reporting and licensing requirements, he said.
The Justice Department declined to comment on the case.
(Reporting by Stephen Gray in London, Maurice Tamman in New York and Florida, and iStories reporter Maria Zholobova; Additional reporting by James Pomfret in Hong Kong and Anna Mehler Paperny in Toronto; Editing by Janet McBride)
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