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The Insider*: Despite sanctions, European manufacturers continue to work with Russian clients

2025.01.24

Companies from the Czech Republic, Poland, Switzerland, and Sweden continue to supply industrial equipment to Russia, which is used in the defense industry

Despite numerous sanctions imposed against Russia, many European manufacturers continue to work with Russian clients. The Insider discovered nine illustrative cases where European companies supplied industrial equipment to Russia, which was then used at defense industry enterprises. The combined turnover of these Russian firms in 2023 exceeded 6.387 billion rubles.

The Czech industrial equipment manufacturer Kovosvit has invested billions of rubles since 2013 in a machine-building plant in the Rostov region, which actively worked with sanctioned Russian enterprises. Although the localized production went bankrupt, Czech machines from Kovosvit continued to be delivered to Russia through an official distributor. After February 24, 2022, 56 shipments of Kovosvit machines and equipment worth $3.162 million were sent to Russia.

Founded in 1995, the company Labara, a comprehensive manufacturer of electrical insulation materials, develops and manufactures electrical components for various industrial sectors. In Russia, the company operates through LLC "Labara-Rus", 88% of whose capital is owned by the Czech firm Labara.

After February 24, 2022, "Labara-Rus" imported 324 shipments of industrial products totaling $5.358 million, including Kovosvit machines worth $210.8 thousand.

In the third year of the full-scale war with Ukraine, a machine-building plant continues to operate in Yekaterinburg. Established in 2015, JSC "GRS Ural" is 51% owned by the Czech TOS Varnsdorf. In 2023, "GRS Ural" increased its business volume by one and a half times: as of December 31, the company's balance sheet in Yekaterinburg included 414 million rubles of finished products, 72 million rubles of work-in-progress, and another 84 million rubles of components for the production of new machines. In 2023, the company's revenue increased to 673.4 million rubles compared to 436.3 million rubles the previous year.

In total, more than $12 million worth of products from the Czech plant were delivered to Russia from February 2022 to September 2024.

The participant of the "Metal-Expo" exhibition in 2023 was the company Meg Metal. From 2015 to 2024, the director of the Swiss Meg Metal SA was the Italian Eric Gaspari. From 2016 to 2021, he was also the sole owner of the Russian company LLC "Eurostal". Its sole owner is now a 27-year-old graduate student of the Research Institute of Applied Mechanics and Electrodynamics, Oleg Peisakhovich, who is likely a nominal owner.

In 2022-2023, LLC "Eurostal" imported 149 types of steel products worth $13.87 million. Although most of these deliveries were made by Chinese companies, products worth $705.9 thousand were received directly from the Swiss firm Meg Metal SA.

To this day, the Swedish GCE Group—a major global manufacturer of gas equipment—has subsidiaries in Russia. From February 2022 to April 2024, the enterprise imported 655 product items to Russia with a total value of $5.82 million.

There are also subsidiaries in Russia of the international group Seco/Warwick, whose headquarters is in Poland. The company manufactures industrial furnaces for producers in the aviation, engineering, tooling, and other heat treatment industries. From February 2022 to April 2024, "Seco/Warwick Rus" imported 149 product items with a total value of $1.41 million. 69% of this amount was sent directly by Polish companies.

* Recognized in Russia as a "foreign agent" and "undesirable" organization.

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