Russia’s biggest weapons maker has been under EU sanctions since 2022. Its 482 subsidiaries are the loophole.
A new NAKO analysis maps 482 companies inside Rostec and finds Western sanctions reach only a fraction of them—which is how the microelectronics in Russia's drones and missiles keep getting through.
In June, world leaders reiterated their commitment to supporting Ukraine and imposing pressure on Russia's economy during the G7 summit in Évian-les-Bains, France. They plan to intensify sanctions against Russia. However, the assembly lines of Russia's military-industrial complex, particularly Rostec, continue to produce weapons and drones.
An analysis by the Independent Anti-Corruption Commission (NAKO) reveals that the targeted sanctions strategy has reached a dead end. To enhance the effectiveness of restrictive measures, allies should consider utilizing export-control mechanisms against entities linked to Russia's defense-industrial complex. A significant issue is the sheer number of Rostec's subsidiaries, totaling 482, many of which operate covertly with complex financial reporting and undisclosed ownership.
While 72% of these entities are sanctioned by Ukraine and 45% by the United States, the European Union has only managed to sanction 23%. The United Kingdom takes an even more selective approach. The lack of coordination among allies, coupled with Rostec's intricate corporate structure, continues to facilitate the flow of Western components and technology to Russia, undermining the impact of sanctions.
Written by urgent.news from Euromaidan Press's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
