Under the Radar: The Hidden Truth About US Exports to Russia's Sanctioned Entities

Executive Summary

‍

The BITE AI platform includes hundreds of millions of worldwide trade transactions that are ingested, transformed, and enriched with indicators of illicit trade. Each month, the BITE team of enforcement SMEs and IT specialists analyze BITE trade data with a focus on the various cross-border violations related to international trade.  In November 2023, the BITE team built on October’s analysis of US brands going to Russia from China and did a deeper dive into the shippers and consignees. This report highlights US-brand goods going to Russian-denied parties. 

‍

The total declared value of US-origin products in Russian imports - post-Ukrainian invasion through July 2023 - was over $2.8 billion, with 6% of the US-origin products classified as high-priority battlefield items. 

‍

This report will assist companies seeking to avoid the transshipment of their products to Russian military end-users by identifying products, companies, and intermediaries transshiping US brands to denied parties in Russia.

‍

Trade Control and Compliance, BITE AI, and Counter Russia

‍

The BITE AI Platform includes millions of worldwide trade transactions that are ingested, transformed, and enriched with indicators of illicit trade and anomalies. This month, our team analyzed trade data, focusing on Russian imports of US brand products to six denied Russian parties.

‍

Russian Supply Chain Analysis: 

‍

In September 2023, the EU and its international partners responded to Russia's aggression against Ukraine with comprehensive sectoral sanctions aimed at weakening Russia's war capability. A List of Common High Priority Items, containing 45 sanctioned dual-use and advanced technology items, is provided to assist exporters with compliance and customs agencies in preventing circumvention of EU sanctions. This dynamic list is adjusted based on the battlefield discoveries and Russia's use of sensitive items. Items on the list include commodities involved in Russian weapons systems used against Ukraine, including the Kalibr cruise missile, the Kh-101 cruise missile, the Orlan-10 UAV, and the Ka-52 “Alligator” helicopter.

‍

As part of our analysis,  the BITE team identified six designated Russian entities that received US-origin products. We subsequently narrowed our focus to identify any significant trade patterns. Those entities revealed are MIKROSAN OOO,JSC TESTPRIBOR, LLC SPETZVOLTAZH, LLC KVAZAR, SATURN EK OOO, and PETERSBURG INTELLIGENT TRANSPORT LOGISTICS (PIT Logistics). These entities were all listed by OFAC in May 2023, except SATURN EK, which was listed in July 2023. 

‍

‍

Between May 21, 2023, and July 31, 2023, these six Russian companies had 405 imports totaling $1,392,053 of US-origin products, which included 130 unique US brands. 86% of these transactions were HS Chapter 85 (Electrical machinery and equipment and parts thereof), and 279 of the 405 commodities were identified as high-priority battlefield commodities. 

‍

In addition to Asia Link Shanghai, which we covered in detail last month, there were a few key transshippers of note identified within the BITE AI Platform. ELMEC Trade OU, STK Electronics, and PT Technology Asia were all recently listed as sanctioned entities by OFAC. Other transshippers of common high-priority battlefield items from countries other than China include: 

‍

OTK GROUP SIA - Riga

THAMESTONE - Geneva, Switzerland

MIKROENERGETYKA SPJ - Poland 

EURO ASIA CARGO PRIVATE - Maldives

‍

Importance of Findings for Export Compliance

‍

US brands and producers must conduct due diligence on their exports to ensure that their products do not end up in the wrong hands. The insights in this article demonstrate how sanctioned Russian entities can acquire US-produced goods despite stringent export regulations and sanctions. It's important to note that while numerous Russian entities face sanctions, entities in countries other than Russia serve as transshipment points.