19 Russian defense companies remain outside international sanctions, helping sustain Russia’s war machine

Ukraine’s military intelligence agency, HUR, revealed data on September 15 detailing 54 Russian defense companies that remain outside international sanctions. Over a third of these entities under KRET, a defense corporation owned by Russia’s state-owned Rostec corporation, escape sanctions. Russia’s defense sector has been under scrutiny since the invasion, with sanctions targeting various companies and individuals to curb its weapon production and financing capabilities.

However, the intricate web of state-owned subsidiaries and holdings can create loopholes, permitting some military-oriented firms to evade sanctions.

The Anti-Corruption organization NAKO reported in August that the European Union had only sanctioned 23% of 482 Rostec-linked entities. KRET specializes in manufacturing electronic warfare systems, friend-or-foe identification tools, and onboard electronics for Russian fighter jets and helicopters. Its subsidiaries contribute to anti-drone systems and remotely operated machine guns, as well as supporting Russian missile production.

For instance, the Signal plant in Stavropol produces compact jamming units for 9M723 Iskander-M missiles, while the Kaluga Research Radio Engineering Institute crafts electronic protection systems for 3M22 Zircon missiles.

HUR also listed 19 unsanctioned companies within KRET that are involved in Russian weapons manufacturing. These firms produce navigation systems for Kh-59M2 and Kh-59M2A guided missiles, gyroscopes for 9M727 cruise missiles, and electric motors for drones, among other components. Among the identified companies are JSC Inertial Technologies of Technokompleks, JSC Tambov Plant Elektropribor, and JSC Ulan-Ude Instrument-Making Production Association.

HUR urges for broader sanctions, better monitoring, and stricter enforcement against violations. KRET, the tenth Rostec holding with its companies listed on HUR’s War&Sanctions portal, now encompasses 764 Rostec enterprises. In September 8, HUR published data on 155 enterprises belonging to another Rostec holding, Roselektronika, of which nearly half were not under international sanctions.