Assess Sanctions On Russia
Out of Stock? Assessing the Impact of Sanctions on Russia’s Defense Industry
Max Bergmann, et al. | 2023.04.14
This report examines the overall impact of Western sanctions and allied export regulations on Russia’s defense sector, as well as the Kremlin’s ability to overcome them.
The report finds that sanctions create shortages of higher-end foreign components and force Moscow to substitute them with lower-quality alternatives. For now, Moscow’s efforts at state-backed import substitution remain largely unsuccessful. This ultimately impacts Russia’s ability to manufacture, sustain, and deliver advanced weapons and technology to the battlefield in Ukraine. Therefore, while the quality of the military equipment used by the Ukrainian army continues to improve thanks to the Western aid, the quality of Russia’s weapons continues to degrade. At the same time, the Kremlin still possesses a significant degree of adaptability to Western sanctions, taking advantage of its prewar stockpiles of older equipment, as well as countries willing to supply Moscow with restricted dual-use items and technology via a web of illicit supply chains. Considering Russia’s existing capabilities and limitations, it will likely opt for a slower-paced attritional campaign in Ukraine, putting pressure on Kyiv and its Western partners, but thereby further stressing its military and industrial base already stretched thin by sanctions and the last 12 months of the invasion.
Introduction
Following Russia’s invasion of Ukraine on February 24, 2022, the United States — along with its allies and partners — introduced an unprecedented set of sanctions and export-control restrictions targeting Russia’s military industrial complex, placing Russian and Belarusian firms operating “in the defense and related materiel, aerospace, electronics, marine, or technology sectors” on the sanctioned entity list. This restricted the flow of sensitive dual-use U.S.-origin technology and software, as well as foreign technology and software made using U.S.-origin products, to the sanctioned companies. Many allied nations in Europe and East Asia, from which Russia would typically purchase such items, have issued similar directives.
As a result of these measures, Moscow has reportedly faced challenges accessing the foreign-made components necessary to produce and sustain a range of weapons systems, from missiles to tanks and aircraft. Western officials have struck an optimistic tone, with U.S. secretary of commerce Gina Raimondo remarking in April 2022, “The Russian military is struggling to find spare parts for their tanks, for their satellites, for their rocket-mounting systems,” adding that the international sanctions regime had blocked Russian access to “almost all semiconductors, night-vision goggles, avionics.” Similarly, in February 2023, U.S. deputy secretary of the treasury Wally Adeyemo declared, “Today, Russia can’t produce enough arms to meet their basic needs,” and described the Russian economy as “nothing like the Russian economy you saw before the invasion.” Yet despite these statements, multiple indicators suggest that the Kremlin has created new ways to circumvent export-control restrictions and secure much-needed foreign components to sustain and produce its weapons systems and wage war on Ukraine.
This report examines the practical ramifications of Western sanctions on Russia’s military industrial base to date and the Kremlin’s ability to overcome them. It does so by analyzing Russia’s defense production capabilities and limitations, including the specific military equipment and technology that Moscow may be able to replace domestically or will struggle to produce going forward, as well as defense capabilities the Kremlin is prioritizing one year into the war.
The unprecedented sanctions and export controls are no doubt having a negative effect on Russia’s industrial complex. Moscow is under pressure to adapt, often turning to less-reliable and costlier suppliers and supply routes, lower-quality imports, or trying to reproduce Western components internally. This is likely hampering the rate and quality of Russian defense production. Nevertheless, available evidence indicates that the Kremlin will still be able to maintain its war efforts in Ukraine. Sanctions and export controls are not a silver bullet that will force Russia to bring the war to an end. Russia’s large prewar equipment stockpiles, its massive military industrial complex, and the prioritization of defense production (especially for parts and components also used in civilian industrial sectors) as part of Moscow’s wartime mobilization are likely to enable the Kremlin to continue to wage war in Ukraine, albeit with limitations.
This does not mean that sanctions and export controls are not having a battlefield impact. The quality of the Russian military in terms of advanced equipment will likely decline, at least over the near term. Russia’s ability to conduct offensive operations that require precision and coordination may be further limited, leading Moscow to rely on potential manpower advantages. Meanwhile, if Western aid continues, the equipment used by the Ukrainian army may continue to improve. Thus, the quality of military equipment used by the Ukrainian and Russian militaries are currently going in opposite directions — and as quality suffers, so will Moscow’s ability to match the North Atlantic Treaty Organization (NATO) conventionally or maintain a vibrant high-end export market for its defense systems. Sanctions and export controls are therefore having an important impact on Russia’s military, which will be felt on the battlefield and into the future.
Expounding upon these points, this report first examines the ability of the Russian defense sector to field the core weapons and systems that make up its war machine. More specifically, it analyzes Moscow’s supply and production of tanks, missiles, uncrewed aerial vehicles (UAVs), aircraft, and electronic warfare (EW) systems. Next, the report looks at the impact of sanctions on the Russian procurement capacity of key foreign components needed to produce high-end defense technology, from advanced tanks to EW devices. These components include optical systems, bearings, machine tools, engines, and microchips. The paper then turns to the Kremlin’s efforts to adapt to the international sanctions regime through methods such as import substitution and sanctions-evasion techniques like illicit trade via land corridors. Finally, the report presents concluding assessments of the impact of international sanctions on the Russian war effort in Ukraine, before outlining a list of recommendations to Western policymakers working to tighten the sanctions net.
Russia’s Capacity to Deliver Key Military Equipment and Technology
Since the start of the 2022 invasion, Russia’s Ministry of Defense has classified all information on military equipment and technologies lost in Ukraine. Yet reliable estimates exist from Oryx, a Dutch open-source intelligence website, which lists destroyed, damaged, abandoned, and captured Russian weapons systems. Oryx only documents losses for which there is visual proof, meaning that its accounting likely represents the lower bound for equipment losses, as there are inevitably battlefield losses without any publicly available corroborating visual evidence. Based on this list, one year into the war, Moscow is no longer in possession of more than 9,700 pieces of military equipment and technology. In addition to Oryx, the Armed Forces of Ukraine (ZSU) also releases data on Russian equipment losses through daily reports, claiming that Russian losses are at least twice as high as Oryx estimates (see Table 1). While the ZSU has access to significantly more information than open-source analysis does, there may also be incentives for Kyiv to over-report battlefield successes. The CSIS research team therefore views these numbers as lower and upper bounds documenting the lost Russian weapons systems.
▲ Table 1: Oryx vs. ZSU Data Showcasing Russian Equipment Losses as of March 18, 2023. Source: ZSU data was acquired from the Kyiv Independent (@KyivIndependent) official Twitter account; Oryx data was acquired from the Oryx website. * These estimates will most likely be higher by the time this report is published, as Russia continues to experience daily vehicle, weapons, and manpower losses in Ukraine. ** The CSIS research team believes that the stark difference in the UAV data has to do with the chosen methodologies. The Oryx investigators count the losses of military UAVs, including the Orlan-10 and Eleron-3, while the Ukrainian side counts losses of all types of UAVs, including commercial drones and quadcopters purchased by Russia from third countries.
Despite the conflicting data, the levels of equipment losses experienced in Ukraine are clearly unprecedented for post-Soviet Russia, and much higher than the Kremlin’s total equipment losses recorded during the first (1994–1996) and second (1999–2000) Chechen wars and in the 2008 Russo-Georgian war.9 But Russia’s military capabilities still greatly outnumber those of Ukraine on most indicators, including man-, air-, land, and naval power. While an accurate count of Moscow’s current military stocks is not available publicly, it has been roughly estimated that, as of February 2023, the total number of aircraft at the Kremlin’s disposal has been 13–15 times more than Kyiv’s. Russia has nearly 7–8 times more tanks and 4 times more armored fighting vehicles, while its naval fleet is 12–16 times larger than Ukraine’s. Yet many Russian stockpiled munitions are also older and of lesser quality, with many also requiring refurbishment before they are battle ready.
Therefore, although Russia retains a formidable arsenal numerically, it is nonetheless important to evaluate its current capacity to deliver key military equipment and technologies to the battlefield in Ukraine. This, in turn, will aid a broader analysis of Moscow’s sanctions-affected defense production capabilities. While Russia relies on a wide range of conventional munitions in Ukraine, the authors of this report have examined the following five weapons systems and technologies widely regarded as crucial to Moscow’s war effort: tanks, missiles, UAVs, aircraft, and EW technologies.
TANKS
Armor, especially main battle tanks (MBTs), remains one of the chief strengths of Russia’s defense industry. Moscow is estimated to have lost anywhere from 1,845 to 3,511 tanks one year into the war — but is thought to hold around 5,000 old tanks in reserve. Recent reports claim that Moscow has experienced particularly heavy losses of its modern T-72B3 MBT — which was delivered in 2013 as an upgraded version of the T-72B MBT. This has ultimately forced Russia to bring older tanks, manufactured several years and sometimes decades prior to the start of Russia’s military modernization program in 2011, into service as replacements.
Furthermore, the rather rare appearance of more advanced equipment such as the T-90A and T-90M third-generation MBTs or the modernized T-80BVM MBT may suggest that they have been intentionally kept off the front lines. In 2020, reliable Russian-language military sources indicated that around 700 T-90 and T-80 MBTs and up to 2,000 mainline T-72 MBT variants were held in Russian military service. By that time, Russia was also estimated to have had 200 T-90, 3,000 T-80, and 7,000 T-72 MBTs in storage — along with thousands of older T-54/T-55/T-62 tanks. As mentioned above, many of these older tanks, including the T-54s and T-55s, have been taken out of storage and sent to the front in Ukraine to supplement earlier losses.
▲ An abandoned Russian T-72 tank in eastern Ukraine in September 2022.
The evidence also suggests that the demand on modern MBTs outstrips the current production rate. For instance, Russian liberal media has reported that UralVagonZavod, a Russian plant producing tanks, can only make 20 tanks per month. By contrast, Russia has lost at least 148 tanks each month, based on Oryx estimates. Recently, deputy head of the Russian security council Dmitry Medvedev has claimed that the Russian military industrial complex will produce 1,500 modern MBTs in 2023 — a statement that independent Russian military experts have assessed as “absolutely impossible.” Some have also suggested that, while it is unlikely that the Kremlin will manufacture 1,500 completely new MBTs, instead Moscow may largely modernize its Soviet-era tanks, equipping them with new communications systems, electronics, and other components. According to a source close to the Russian Ministry of Defense, even though the ministry plans to produce several hundred new T-90M and T-14 MBTs, it will allegedly mostly upgrade its T-80, T-72, and older T-62 tanks. Therefore, while the Russian military industrial complex may struggle to roll out new MBTs, its domestic defense enterprises might be adapting to the challenges brought about by sanctions by repurposing older equipment for tanks and other armored vehicles. This may enable them to resurrect around 90 older MBTs per month, by some accounts.
Overall, even though Russia has lost a sizable share of its prewar tank fleet — up to 40 percent, according to some estimates — it likely retains some of its post-2011 MBT stockpiles, as well as large amounts of the Cold War–era tanks and defense industrial capacity to repair and modernize this equipment. Therefore, the Kremlin will likely be able to maintain the supply of tanks to its forces in Ukraine for some time. However, in the longer term, the allied export restrictions on certain key Western spare parts used in modern tank production — discussed in detail in the following section — may significantly degrade Moscow’s defense industrial capacity to manufacture advanced MBTs.
MISSILES
Missiles have played an important role in Moscow’s offensive military operations against Kyiv. While Russia has reportedly fired around 5,000 missiles and lost at least 139 missile systems within the past year (see Table 1), exact information about the Kremlin’s initial and remaining stockpiles is extremely difficult to ascertain.
Figure 1 depicts the total weekly numbers of missiles that Russia used to strike military and civilian targets in Ukraine between late August 2022 and mid-March 2023. While patterns of greater strike frequency tend to follow periods of relative inactivity, it cannot be decisively concluded solely from this data that the Kremlin currently experiences serious issues with its missile stockpiles.
▲ Figure 1: Average Number of Missiles Russia Launched against Ukraine, August 2022 to March 2023. Source: Based on data compiled by the CSIS Europe, Russia, and Eurasia team with assistance from the Conflict Intelligence Team using open-source data.
The major issue for Ukraine is that while its air defense capabilities have expanded and improved, giving it an ability to defend against many types of Russian missiles, it does not have an ability to intercept some of Moscow’s newer and more advanced systems, including the hypersonic Kinzhal missiles, as well as older but repurposed munitions such as the S-300 missiles. For instance, during a March 9 missile barrage, Ukraine was only able to intercept 38 of the 81 missiles that Russia had fired. Kyiv is expected to receive the Patriot missile defense systems and the SAMP/T-MAMBA air defense system from its Western partners sometime in spring 2023, which should give it a greater ability to defend against Russian missiles. However, a critical question is how long Moscow can sustain its barrage of Ukrainian targets with more advanced missile systems.
This also raises questions both about Russia’s ability to produce new missiles and its depth of stockpiles. According to James O’Brien, head of the office of sanctions coordination at the U.S. Department of State, Russia can currently make around 60 to 90 “missiles and strategic weapons” per month. Moscow does not provide such data, but it asserts that it has sufficient reserves of long-range precision munitions and that Russian factories are also currently producing more of these weapons, claims that are backed by some Western and Ukrainian sources. For instance, evidence documented by Conflict Armament Research (CAR) suggests that the two Kh-101 latest-generation air-to-surface long-range cruise missiles deployed by the Russian Armed Forces in a November 2022 attack in Ukraine had been almost certainly produced no more than two months before their use. More recently, Ukraine’s military intelligence has reported that Russia makes around 30 Kh-101s and 20 Kalibrs a month. Moscow’s ability to make advanced cruise missiles such as the Kh-101 and Kalibr could indicate that it has found ways to acquire foreign-produced microelements by circumventing existing export regulations — or that it accrued significant stockpiles of those components in the years preceding the 2022 invasion. If the latter stands true and foreign electronics used in Russian missiles today were purchased and stockpiled before February 2022, once this supply decreases due to the war and export controls, missile production will also be affected.
In fact, some experts believe that there are already very visible signs of Moscow’s long-range precision-missile stocks decreasing, while their production rate may not be sufficient to enable Moscow to continue frequent missile strikes. In late November 2022, Ukrainian minister of defense Oleksii Reznikov stated that the Kremlin had lost around 24 percent of its ground-, sea-, and air-launched high-precision missiles. These numbers included reduced stocks of the Kalibr and Kh-101 inventories (around 37 percent and 50 percent of the initial stocks, respectively). More recent reports from the front also suggest that the Kremlin might be running out of its modern Iskander ballistic munitions.
These stockpile losses might have diminished Russia’s ability to sustain the current rate of fire using modern precision-guided munitions, ultimately forcing Moscow to rely on its older and less accurate, yet more generous, missile arsenal and, in certain cases, draw on its stockpiles of nuclear delivery systems to sustain conventional missile strikes. For instance, Russia has repurposed its S-300 surface-to-air defense missiles to hit ground targets in Ukraine. While, as mentioned above, the S-300s are difficult to intercept, they are also less accurate, often exploding hundreds of yards from their initial targets. Moscow has also repurposed its anti-ship missiles like the Onyx to strike surface targets, as well as the older Kh-55 missiles — initially designed to carry nuclear warheads — allegedly to exhaust Kyiv’s air defenses.
▲ A Russian S-300 missile system presented during the Victory Day parade on May 9, 2015.
Even though in a March 9 air strike Russian forces fired six new hypersonic Kinzhal missiles, resulting in a much higher than usual success rate, such powerful munitions have been very rarely used in Ukraine (usually, to hit targets of high importance such as the Ukrainian energy infrastructure). Kyiv claims Moscow to have no more than 50 Kinzhals in storage, which can explain why they are deployed at much lower rates in Ukraine. There is also a limit to how many prestige weapons systems Russia can expend in Ukraine without undermining its defense posture against NATO and other militarily advanced countries. To put Russia’s missile stockpiles in perspective, a recent RAND Corporation report found that building up large stockpiles of long-range precision-strike missiles was viewed by the Russian military as vital to deterring NATO. Using publicly available targeting information from Western campaigns and Russian theoretical writings, RAND estimated that large military areas, such as airfields, would need around 30–60 cruise missiles, and critical military facilities and complex air defense structures might require 75–100. Going forward, without an assured supply chain to manufacture more, the Kremlin might have to retain a large proportion of its already decreasing long-range precision munition stockpiles, ultimately restricting the ability of the Russian Armed Forces to frequently strike Ukraine with missiles in the coming months — leaving them to rely more on long-range drone strikes, as discussed below.
Overall, Russia is likely depleting its stockpile of advanced long-range precision munitions in Ukraine. However, it has demonstrated an ability to continue to manufacture new missiles, albeit at a slower pace, and has stockpiles of older and less precise systems. As Kyiv acquires additional advanced Western air defense, this may impact Russia’s willingness to expend its precious, hard-to-produce advanced missile systems in Ukraine.
UNCREWED AERIAL VEHICLES
UAVs, including combat drones, remain one of Moscow’s pivotal combat elements against Ukraine. According to the Kremlin, at the start of the war in February 2022, Russian troops had approximately 2,000 military drones of all types at their disposal across the services and military commands. By the end of 2022, several hundred of these drones had been destroyed by Ukrainian air defense, EW countermeasures, or Russian pilot errors. Still, Russian-made UAVs — including the Orlan-10 intelligence, surveillance, and reconnaissance (ISR) and Lancet-3 loitering kamikaze drones — continue to fly in Ukraine, indicating that this pivotal aerial capability matches at least part of Moscow’s demand for ISR and combat missions against Kyiv.
▲ A downed Russian drone in Kyiv in March 2022.
Since the start of the war, Russian officials have stressed the importance of launching a large-scale production of UAVs of various kinds. Russian defense conglomerate Rostec also confirmed in January 2023 that it is manufacturing new reconnaissance and combat drones, albeit without providing any production rate numbers. However, recent statements by Russian UAV industry representatives suggest that due to high demand, domestic defense enterprises might be struggling to provide UAV-related IT solutions, as well as necessary information security products and equipment.
To compensate for the existing domestic constraints with UAV manufacturing, the Kremlin has increased its reliance on Chinese commercial drones despite their limited range and capabilities as civilian-designed UAVs. Most of these civilian drones are produced by Chinese tech companies, including Da-Jiang Innovations Science & Technology Co. (DJI), and up until recently could have been purchased through the Chinese online retail service AliExpress. In an effort to restrict these drones’ use on the battlefield in Ukraine, AliExpress has temporarily restricted Russians from buying DJI drones as of March 2, 2023, and those already purchased will allegedly have their functionality limited. This may reflect a concern among China-based companies of being subject to potential secondary sanctions from the West. However, these drones can be purchased from other countries and ultimately shipped to Russia. There is also a continuous flow of DJI quadcopters to the front due to Russian volunteers’ organized procurement efforts.
Russia has also received — and will likely continue to receive — loitering (kamikaze) UAVs from Iran and commercial DJI-type quadcopters and multirotor UAVs via supply chains from the United Arab Emirates, Hong Kong, and Singapore as late as November and December 2022. Moscow is particularly interested in acquiring up to 6,000 Iranian drones due to their low cost and apparent ease of operation. The Shahed-136 (flying under a Russian Geran-2 name), for example, an Iranian drone frequently used by the Russian military against Ukrainian energy infrastructure and military targets, is relatively cheap with a price range of around $20,000 to $50,000 per unit. Moscow’s potential acquisition of more Iranian loitering drones — whether via a transfer or by constructing a UAV-manufacturing factory in Russia proper — may enable continuous rounds of Russian drone attacks, extracting significant costs on Ukrainian air defense and impacting both dual-use targets and the civilian population.
AIRCRAFT
Russia is estimated to have lost anywhere between 78 and 305 aircraft in the war and to have kept roughly 4,000 in reserve. Moscow has largely deployed older aircraft in Ukraine, including the Su-25s, with limited success. More advanced aircraft such as the Su-34s and Su-35s, the latter considered Russia’s flagship heavy fighter, have also been spotted over the skies in Ukraine (especially the Su-34s). While Russia’s next-generation fighter aircraft, the Su-57s, due to their high cost and limited production rate, were most likely restricted from flying over Ukraine to avoid being shot down by Ukrainian air defenses. Interestingly, as the war demonstrated the relative effectiveness of less-expensive weapons systems like missiles and drones over Russian aircraft, the Kremlin reportedly traded more than 60 Su-35s to Iran in exchange for several thousand drones used to target Ukrainian civilian and dual-use infrastructure.
Furthermore, Russia’s aviation sector is among the industries hardest hit by the allied export restrictions. Following the invasion, major U.S. and French plane manufacturers Boeing and Airbus ceased deliveries of new foreign jets and spare parts to Russia. Sanctions have impacted Moscow’s ability to sustain its older aircraft, as well as to further develop and mass produce its next-generation combat vehicles, including the Su-57s, which depend on imported advanced machine tools and engines (as discussed in the next section). As there is some overlap between parts used for military and civilian aircraft, Russia reportedly started stripping spare parts from its passenger aircraft in summer 2022, which has created additional complications, most mechanical in nature, for the already struggling domestic civilian aircraft industry. More recently, Rosaviatsia, Russia’s Federal Air Transport Agency, has approved “aircraft cannibalization,” allowing spare parts from grounded airframes to be reinstalled on in-service aircraft.
Going forward, sanctions will likely make it even more difficult for Russia to manufacture next-generation combat vehicles, ultimately impacting the military reputation of the Russian Air Force and Moscow’s ability to find customers for its domestically manufactured combat aircraft.
▲ In October 2022, a Su-34 crashed into a residential building in the Russian town of Yeysk, located near Ukraine. Russian authorities said a “technical malfunction” was a likely cause for the accident.
ELECTRONIC WARFARE SYSTEMS
Electronic warfare (EW) uses radio signals, infrared sensing, jamming, and radar to track adversaries and interfere with their communications systems. During the 2010s, Moscow made considerable advances in EW, acquiring several hundred various new and modernized EW systems designed to defend ground forces, aircraft, and surface ships from the enemy’s radar and precision-guided munitions and to conduct ISR operations. Throughout 2022, Russia has used these EW systems with relative success, reportedly eliminating up to 90 percent of the drones Kyiv possessed in February by summer 2022 and actively jamming the air-to-ground and air-to-air communications of Ukrainian pilots.
Among the specific EW technologies used by the Russian Armed Forces, the Palantin EW system has been the most effective at jamming small Ukrainian drones. Other notable EW technologies are the Svet and Tirada EW systems — which Russia has used to determine the position of enemy forces — and the Rtut EW device that has impacted radio fuses on Ukrainian artillery shells.
Russian EW systems also come with downsides that have restricted their ability to prevent Ukrainian military advances during the Kyiv, Kharkiv, and Kherson offensives. First, they cannot cover the entirety of the front, only parts of it, which has enabled Ukrainian military activity even at close range, as evidenced by numerous videos of Ukrainian drones dropping munitions right on top of Russian ground positions. Russia’s EW systems also work best when their operators have plenty of time to set up and coordinate different functions and hence are less effective when Russian battalions attack and retreat quickly. Due to poor planning and lack of coordination, Russian EW troops even jammed their own communications in the first days of the war.
An additional limitation is that these systems cannot work continuously. With a restricted lifetime of around 900 to 1,000 hours, each EW system can only be turned on for three to four hours per day, meaning that at least six to eight systems are needed to cover a particular zone for 24 hours.
Finally, to produce its EW systems, Russia keeps relying on Western electronics, including components restricted by the allied export regulations such as microcontrollers, microprocessors, controller area network (CAN) transceivers, digital signal processors, and Global Positioning System (GPS) receivers, among others.
While not directly related to EW, another important factor worth noting is the Russian military’s flawed use of communications systems. For instance, at the beginning of the invasion, Russian forces used civilian mobile phones and Chinese portable radios for communication purposes that lacked military-grade encryption, naturally impacting their performance on the battlefield. Recent reports show that, while this issue has been acknowledged, the Russian military still, in some cases, relies on unencrypted communications, endangering operational security in Ukraine. Reportedly, Russians are also purchasing China-made counterfeit radio stations.
Going forward, the Armed Forces of Ukraine can exploit the downsides exhibited by Russian EW and communications systems to negate the alleged strengths of these technologies on the battlefield.
The Kremlin’s Existing Vulnerabilities
The previous section demonstrated that high reliance on imports of sensitive technology is one of the main vulnerabilities of Russia’s defense sector. This section identifies the key dual-use components, restricted under the allied export regulations, likely to present particular challenges for Russia’s efforts to continue producing advanced MBTs, missiles, UAVs, aircraft, and EW devices.
OPTICAL SYSTEMS
Optical systems are pivotal to Russia’s modern MBT industry. Before the war, the Russian military imported a critical mass of its leading tank optical systems from France, which has now cut off Russian producers from this important component. Russia appears to be retrofitting its T-80BVM MBT with an optics configuration, the 1G42 gunner sight, which originates from an older model vehicle. Similarly, there are reports that the Russian military is retrofitting its T-72B3M tanks with the less-sophisticated 1PN96MT-02 sight, rather than the higher-end Sosna-U, which can spot enemy tanks up to two kilometers farther away. Additionally, unlike the 1PN96MT-02, the higher-grade Sosna-U system has a daytime channel, instead of just a thermal-imaging channel, and the more advanced ability to use computer sensors to help track targets. It is likely that sanctions and export controls are directly contributing to Moscow’s decision to replace higher-end optical systems with their less advanced alternatives.
Russia’s tank fleet will likely become even less sophisticated as the war continues. With recent announcements of Western tank deliveries to Ukraine, a mismatch in tank technology could prove costly for Russian efforts to shift the line of battle westward.
BEARINGS
Bearings are critical to producing any type of moving vehicle. Historically, Russia has imported most of its high-quality bearings from Western manufacturers. In 2020, for instance, Russia imported over $419 million worth of ball bearings, around 55 percent of which originated in Europe and North America; Germany was Russia’s largest trading partner, taking up 17 percent of its total imports that year. Following the start of the invasion, major Western producers of bearings exited Russia and ended their sales there. The U.S. government believes that Russia already faces a shortage of this key component, which impacts the production of all vehicles, from tanks to aircraft and even submarines. This shortage is also felt in the civilian industry, as Russia’s rail-dependent economy finds the production and repair of trains directly impaired. Russian domestic producers claim they can reverse the deficit in bearings via import substitution initiatives. Russia could also expand its imports of bearings from China or countries in Southeast Asia such as Malaysia.
In sum, while Moscow might be able to substitute the import of Western bearings and thus maintain the level of defense-sector production needed to continue its war effort, these bearings will most likely be of a lower quality, which could impact reliability.
MACHINE TOOLS
Similarly, Russia’s dependence on Western-produced precision machine tools is a structural supply chain weakness aggravated by increased economic isolation. Machine tools are critical in the production of numerous weapons and military vehicles, including aircraft. Even before Russia’s 2022 invasion, the country’s machine tool industry had long been in crisis. Despite efforts to diversify away from Western sources since 2014, Western-aligned firms together still provided the overwhelming majority of Russia’s imported machine tools in 2017. Estimates claim that Russia depends on imported products for up to 70–80 percent of its machine tools and construction equipment. With 85 percent of Russian machine tool demand allegedly coming from the defense industry, it is surprising that the government has allowed Western countries to continue to play such a pivotal role in the Russian supply chains of the most technically advanced tools. China, the largest total producer of these items worldwide, also remains dependent on Western imports to build the kind of medium- to high-end machine tools that Russia’s domestic defense market lacks.
Ultimately, Russia faces a critical deficiency of complex multi-coordinate precision machine tools of the most advanced categories, and it lacks the time and capability needed to find substitutes for Western suppliers. While Russian producers claim to have designed and built a high-end computer numerical control (CNC) machine tool entirely out of domestically produced components, assertions like this are difficult to trust or verify.
ENGINES
Russia has struggled to access certain important aircraft engines since 2014 due to its dependence on the Ukrainian producer Motor Sich for key components in their production. By 2005, the Kremlin had already identified the need to move toward fully domestic helicopter engine production, but this goal has remained seemingly unrealized. In 2014, Russia state-aligned media announced the expansion of operations at the St. Petersburg Klimov plant — a subsidiary of the state-owned Rostec corporation — with the explicit goal of replacing the Russian military’s dependence on Motor Sich’s aircraft engines. Yet the October 2022 arrest of Motor Sich’s owner, Viacheslav Bohuslaiev, in Ukraine on charges that his firm relied on transnational networks to supply Russia with helicopter engines and components suggests that Moscow’s own efforts to increase its supply of engines through import substitution remain incomplete. Indeed, Russia’s trouble with production of high-end engines was already notable before the 2022 invasion. For example, the new Su-57 fighter jets allegedly still rely on older fourth-generation engines — specifically the Saturn AL41-F1 engines used in the previous Su-35S aircraft — while efforts to produce a more advanced engine have been repeatedly delayed, providing further evidence of Russia’s difficulties to produce the most cutting-edge fighter jet engines.
Russia’s civil industries similarly suffer from the shortage of aircraft engines. For example, its Sukhoi Superjet 100 airplanes might now be relying on engines produced from the used components of 17 types of older engines. Similarly, Chinese engine producer Weichai has stopped providing engines for use in tractors produced by the Russian firm KamAZ, as the latter was placed under Western sanctions for being an alleged supplier of materiel to the Russian military. Just as with the Sukhoi Superjet 100, KamAZ is now apparently producing tractors with an outdated 820 (V8) gas engine. These examples suggest that export controls are in some cases forcing Russian producers to turn to older models to fulfill engine production targets.
MICROCHIPS
Russia’s domestic chip production is many years behind the industry standard in the West, making its weapons, communications, and EW systems highly reliant on Western-manufactured microchips, which are currently restricted under the allied export regulations. For instance, according to the UK-based Royal United Services Institute (RUSI), the Orlan-10 UAV contains U.S.-origin chips manufactured by Texas Instruments and Honeywell. Open-source data also confirms the presence of Western-manufactured chips inside Russia’s Lancet drone. Furthermore, an investigation by Conflict Armament Research has shown that satellite navigation units in several Russian missiles — such as the 3M14, 9M544, Kh-59, and Kh-101 — contain multiple foreign-made microcomponents manufactured between 2012 and 2020.
Russia’s newly developed radio communications systems — including the Azart portable radio station, designed to provide jamming and secure communications at the tactical level — also appear to rely on many Western-produced components. According to data provided by the Center for Army, Conversion, and Disarmament Studies (CACDS), the Azart holds six components of foreign origin, including the Spartan-6 chip, which encrypts communications and is produced by the U.S. company Xilinx in Taiwan. As a dual-use item, the Spartan-6 is commercially available and can be purchased via AliExpress. Similarly, Russia’s reconnaissance, command, and communications complex Strelets-M relies on seven components of foreign origin, including a chip produced by the U.S.-based Microchip Technology.
The dependence of Russia’s military industrial complex on foreign-manufactured microchips can be explained by at least two factors. First, chips and chip microprocessors produced domestically by a small number of companies — such as Baikal Electronics, STC Module, SPC Elvis, and MCST — tend to be of inferior quality to Western designs. In early 2022, the Russian Ministry of Internal Affairs even complained about the difficulties of launching and operating equipment based on the domestic Elbrus-8C processors. Following the imposition of Western sanctions, these companies have been unable to officially purchase technologies from the United States and its allies participating in the sanctions regime, including the Taiwan Semiconductor Manufacturing Company (TSMC) on which Russian chip producers greatly relied. Replacing these components with Chinese options in some cases requires a complete redesign of electronic equipment and restructuring of cooperation chains, which may take years to complete. Moreover, Chinese chips often lag behind the leading Western microchip designs. While certain chips (such as the Spartan-6, the TSOP66, and the LQFP64) found in the Russian-made Azart and 9M544 precision missile can be purchased via AliExpress, as mentioned above, dependence on such commercially available elements can make Russian weapons systems less reliable and prone to failure. For example, Deputy Secretary of the Treasury Wally Adeyemo suggested that “nearly 40 percent of the less advanced microchips Russia is receiving from China are defective.”
Second, the Russian chip industry cannot meet high demand for these elements. Today, the country requires up to 30,000 plates of basic-level microchips per month, but only 8,000 plates can be made domestically. Recently, the government announced the launch of a new technology park in the country’s Ulyanovsk region as part of an effort to accelerate its chip production. Yet, under the export controls, it would be difficult to estimate the park’s production rate and quality of its products.
Due to these restrictions, and to ensure continued access to high-quality microchips for its weapons systems, Moscow has developed a number of illegal supply chains, discussed below.
Russia’s Sanctions Adaptation Strategy
Russia was first sanctioned by the West in 2014, following its intervention in Ukraine. In response, Moscow made it a national security priority to reduce its dependency on Western imports, including in the high-tech sector, albeit with limited success. Since the start of the 2022 invasion, the Kremlin has expanded upon the 2014 import substitution efforts, aiming at replacing imports in all aspects of its economy, including the military sector, with domestically produced materials. Yet import substitution has proved to be a daunting task for Russia’s defense industry given its reliance on foreign-produced microelements and spare parts. While Iran — already a sanctioned economy — continues to supply Russia with certain military equipment and technologies, many countries outside of the transatlantic community cannot openly aid Moscow’s war effort without risking sanctions by the West. This forces Moscow to rely on illicit supply chains to obtain restricted foreign elements. While Russia’s efforts to circumvent sanctions will have successes and will mitigate their impact, the Kremlin’s sanctions-evasion efforts also face their own limitations. Sanctions are thus likely to reduce the volume of components Russia can import, increase the costs of those imports, and lead to supply disruptions that affect industrial output. This section examines Russia’s ongoing attempts to adapt to the Western sanctions regime and mitigate its impacts on the domestic defense sector.
THE KREMLIN’S IMPORT SUBSTITUTION EFFORTS
The Russian government has repeatedly promised to accelerate import substitution for domestically produced equipment heavily reliant on foreign components, including armored vehicles, UAVs, and EW technologies. Yet several months before the war, Russia’s own internal assessment of the defense program introduced in 2019 found it largely unable to provide domestic replacements for Western equipment and electronics. Western intelligence corroborates this assessment.
More recent initiatives the Kremlin introduced after the invasion also tend to be viewed as too ambitious and far-fetched by local defense and military experts. For instance, to reduce Russia’s dependence on imported microchips, in mid-October 2022 the government introduced the National Project for Electronics, aimed at significantly boosting production of microprocessors and supplying around 30 percent of Russian households with Russian-made electronics by 2030. But Russian tech specialists criticized this project, with its estimated cost of up to $42 billion, for being “virtually impossible to implement” within the given timeframe. Russia is far behind the technology frontier to produce the full range of advanced microchips its defense industry requires within this timespan. Similarly, in mid-February 2023, the Kremlin announced a new national project featuring a grant program to produce necessary UAV components inside the country. However, the implementation of this project will take years, if not decades, to realize. Even Russian minister of finance Anton Siluanov recently acknowledged that “it just takes more time” to replace foreign equipment and electronics with domestically produced alternatives.
One of the government’s more tangible approaches includes funding existing defense enterprises to boost their production. Russian state-owned defense conglomerate Rostec is one of the chief enablers (and beneficiaries) of the Kremlin’s decision to pivot to domestic production. Rostec routinely advertises its capacity to help manufacture a range of modern weapons systems, including UAVs, tanks, aircraft, and missiles. Since the start of the war, it has promoted its ability to create high-quality technologies that can be exported abroad, among them Russian-made anti-drone (the Repellent-1, RLK-MCE, RB-504P-E, and RB-504A-E) and anti-aircraft (the Pantsir-S1, Tor-M2KM, Tor-M2E, and S-350E Vityaz) missile systems. Rostec is expected to attract a significant share of state funding, including 4.7 billion rubles (around $62.6 million) in the 2023 fiscal year. Although the United States and its allies sanctioned Rostec and its subsidiaries in June 2022, specific transactions involving certain Rostec-affiliated blocked entities, such as those that ensure the safety of civil aviation, can still be authorized. This might allow the defense conglomerate to circumvent sanctions by acquiring certain dual-use technologies through its affiliated firms involved in civil aviation.
▲ The Rostec headquarters in Moscow, Russia.
The government has also supported private defense enterprises, including the Kronshtadt Group, a Russian defense contractor manufacturing UAVs such as the Orion drones, which have also been deployed in Ukraine. While the United States sanctioned Kronshtadt in March 2022, the company has long claimed that it can domestically produce all components for its growing list of ISR and combat UAVs. Yet anecdotal evidence suggests that the firm might have an office in Antalya, Turkey — in theory enabling Kronshtadt to import necessary components for its UAV production.
Overall, Russia’s current efforts at import substitution are fraught with challenges stemming from largely inadequate state aid programs and limited official supply chains, which are ultimately restricting the production capabilities of Russian defense enterprises.
SANCTIONS-EVADING LAND CORRIDORS
Facing obvious import substitution challenges, the Russian government swiftly established alternative routes to access restricted foreign components and technologies. This effort, which increased throughout the second half of last year, has so far proved to be somewhat successful, as imports of dual-use commodities to Russia in 2022 exceeded their prewar levels, according to multiple sources. For instance, the value of semiconductor imports rose from $1.82 billion in 2021 to $2.45 billion in 2022, based on estimates by the Free Russia Foundation. But to reach Russia shipments now have to go through numerous obscure suppliers and multiple land corridors, as detailed below, making this experience rather volatile, costly, and time-consuming for the Kremlin.
Despite facing additional Western sanctions for aiding Moscow’s war efforts, Iran has remained one of Russia’s regular suppliers of both key weapons systems, including the Shahed-136 UAVs, and restricted dual-use components. Interestingly, according to CACDS, even Iranian-origin Shahed-136 drones contain microelements produced across various Western nations, including microcontrollers and microprocessors made by the U.S.-based Texas Instruments and NXP USA Inc., respectively. Given that Iran has decades of experience circumventing Western sanctions, Tehran can likely illegally access such components for its growing UAV industry and share that experience with Moscow.
One of the Islamic Republic’s ways to receive Western-manufactured weapons and components is across its poorly monitored borders with Iraq. According to Middle East expert Vera Mironova, Iraq purchases multiple high-tech Western-produced components, including engines, under the pretext of an alleged war on terrorism. Those items are then sent to Iran, ultimately ending up in Russian ports, including Astrakhan, via the Caspian Sea. This geographical corridor features numerous existing and newly constructed infrastructure projects from Iran across the Caspian Sea and into Russia. Tehran and Moscow are also considering a sanctions-evading rail link, running along the coast of the Caspian Sea, that would connect India to Russia through Iran and Azerbaijan. This project, which supposedly will be completed in three years, is considered a much shorter and less time-consuming alternative to the current sea route that requires India to ship goods to Russia through Europe.
Besides Iran, China is reportedly another Russian source for dual-use goods. Based on Russian customs data, Chinese state-owned defense enterprises export microchips and microchip components, engine pieces, navigation equipment, jamming technology, and jet fighter parts to the sanctioned Russian defense companies, including Rostec and its affiliates. Russian entities might have also received up to 1,000 “civilian hunting rifles,” as well as 12 shipments of drone parts and around 12 tons of body armor from Chinese firms, which were routed via Turkey and the UAE between June and December 2022. While Chinese officials say that Beijing is committed to promoting peace talks, there are growing signs that it might actually be considering supplying the Russian military with the ZT-180 prototype kamikaze drones, which bear a close resemblance to the Shahed-136 UAVs.
The Balkan peninsula is another popular location for intermediary companies involved in sanctions evasion. For instance, Bosnian firm Inzenjering BN, based in the Republic of Srpska, has reportedly supplied helicopter engine parts to the Russian army with the help of Ukrainian company Motor Sich since 2017. In 2018, Motor Sich delivered more than 600 shipments containing the TV3-117 helicopter engines to Inzenjering BN, which then allegedly shipped them to Russia. In October 2022, Ukrainian authorities arrested the head of Motor Sich, Viacheslav Bohuslaiev, for supplying Moscow with helicopter engines and other spare parts. Yet the company could have delivered significant shipments prior to Bohuslaiev’s detainment. More recently, an investigation by the Balkans–Ukraine Cooperation Network discovered that Moscow-based Russian military–affiliated manufacturer Aerotechnikservis (ATS), which supplies helicopters and aviation components, closely cooperates with the firm Aero Engineering Solutions (AES). AES is owned by Canada-based company Aerosupport Solutions Ltd., with offices in Sarajevo and the Republic of Srpska. In 2022, AES sent several cargoes of Western-manufactured components needed for Russian-made helicopters (including the MI-8 and MI-171) to ATS through these routes.
Turkey has also emerged as an important intermediary involved in smuggling sanctioned goods. According to Reuters, Turkish company Azu International alone has exported more than $20 million worth of components to Russia, including U.S.-origin microchips. Another firm, CTL Diş Ticaret Limited Şirketi, established by Russian national Pavel Pertsov in March 2022, shipped navigation equipment, potentially including GPS systems with anti-jamming technology and high-precision positioning products for UAVs, from a Canadian firm to Russian enterprises supplying the domestic defense sector. Even though Turkish customs authorities have reportedly been rejecting transit declarations for sanctioned goods that had Russian and Belarusian entities listed as end users due to “pressure from the European Union” since March 2023, this will not eliminate an important transit hub, but will make it costlier for Moscow to access the restricted components via Turkey.
Many post-Soviet countries across Central Asia and the South Caucasus also take considerable risks to supply Russia. For example, imports of different Western-made spare parts from Armenia, Georgia, and Kyrgyzstan have increased significantly since the start of the war. Some Western manufacturers now even ask their customers to confirm that their physical location is outside of Russia by scheduling video calls with procurement officers. Illegal supply chains also run through the member states of the Russia-led Eurasian Economic Union (EEU), which includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The EEU offers a particularly convenient land corridor for avoiding sanctions, as products imported into the EEU countries are also provided with guarantees valid for Russia. While, recently, Kazakhstan has promised to “closely monitor our mutual trade with all partners” (including Russia), in an effort to avoid secondary sanctions, time will show the effectiveness of such an effort. In addition to the EEU member states, Georgia may also be providing another route via modernized Black Sea port facilities. Reportedly, cargoes with shipping labels for Central Asia are offloaded in Georgia and then transported to Russia by various trucking companies. Lastly, Belarus is emerging as an important corridor for clandestine transfer of Chinese goods and/or equipment to Russia, such as combat drones, personal weapons, and artillery shells.
Although extensive, these land corridors do not provide a complete picture of the sanctions-evading supply chains developed by Moscow. In 2022, Russia imported numerous restricted high-tech components from third countries across Asia, Africa, and Europe through a multitude of shell and front companies using false end-user certificates and transshipments. While these exporters are, in many cases, operated by foreign-based Russian nationals or expatriates with limited public profiles, the local authorities of countries allegedly used as land corridors should monitor the situation more carefully to avoid the risk of secondary sanctions.
Conclusion
Since the start of the 2022 Russian invasion of Ukraine, the U.S. government and its allies have initiated a commendable effort to prevent the Russian military from accessing the key components, elements, and materials outlined in this paper. U.S. intelligence has estimated that since February 2022, export controls have degraded Russia’s ability to replace more than 6,000 pieces of military equipment, forced key defense industrial facilities to halt production, and caused shortages of critical components for tanks and aircraft, among other effects. Efforts by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) span the globe and represent some of the widest sanctions attempted against a country to date. The Kremlin is aware of this work and seeks to circumvent OFAC and its affiliated initiatives in a race that may well determine the outcome of the war in Ukraine. The Department of the Treasury and broader U.S. government recognize the magnitude of the task before them and are adjusting their actions based on real and intended outcomes. These efforts will become even more important as the war enters its second year and the Russian military shows no signs of abandoning its major goal of occupying Ukraine.
Due to the classified nature of the data in question, many of the assessments in this paper have had to rely on incomplete or circumstantial evidence. Nonetheless, this paper draws several conclusions about the impact of sanctions to date.
1. Sanctions work by creating shortages of certain higher-end components and forcing the Russian Ministry of Defense to substitute them with lower-quality alternatives.
In particular, the sanctions have forced Russia to rely on older and less accurate missiles. However, the Russian military’s continued strikes against Ukraine are an important indicator that the Ministry of Defense can still adapt by repurposing different types of missiles. As long as the Russian forces can conduct such attacks — even if they are less frequent and less accurate — there is still a danger to the Ukrainian military and to civilian targets, not to mention the collateral damage that is an egregious and unfortunate consequence of such strikes. Russia’s ability to continue such attacks may be augmented by efforts of partner nations such as Iran or China, whose deliveries of parts and technology may not be impacted by the U.S.-led sanctions efforts. Given the Russian military’s prioritization of missile strikes on the battlefield, such tactics will likely continue, albeit with limited frequency, well into 2023.
Second, the impact on engine production can have long-term effects on the Russian military, especially on recovery, repair, and rebuilding efforts and attempts to develop and deliver newer military systems to the front, including aircraft. The Russian government is aware of this impact, evidenced by its continuing attempts to portray domestic heavy industry and the war effort as being unaffected by sanctions.
Third, the Russian government’s efforts to acquire microchips produced by the world’s leading companies has received significant attention since the start of the war. Numerous investigations, some outlined in this report, point to the difficulty of fully and completely controlling the flow of this technology to Russia. Given their importance to Russian military systems, weapons, and technologies, the Kremlin’s efforts to acquire microchips may become even more pronounced in 2023. Reliance on imported microelectronics products that may be inferior to some of the market leaders could potentially affect the quality of Russian-manufactured weapons but will not entirely slow down or prevent the Ministry of Defense from conducting military operations. At the same time, Russia’s own domestic push to launch microchip production is a long-term effort that is unlikely to deliver immediate results for either civilian industries or the military. As the war enters its second year, the Russian government is likely to intensify its attempts to acquire microchips via existing efforts outlined in this paper, as well as through new schemes to circumvent sanctions.
Fourth, Russia is likely experiencing shortages of advanced optical systems, forcing it to retrofit its tanks with less-sophisticated systems, a mismatch that could prove costly for Russian efforts to shift the line of battle westward.
Fifth, Russia likely faces a shortage of bearings, which impacts the production of all vehicles. However, Russia might be able to substitute existing shortages with Asian components of a lower quality. The full impact of such shortages is unknown given Russia’s ability to wage war well into 2023.
2. Russia still possesses a remarkable degree of adaptability to Western sanctions.
The Russian military is crafty in its use of dual-use components. Russia is by no means the first country to turn to civilian technology to augment its military capabilities, but the size and scope of this war is forcing Moscow to work on an unprecedented scale.
Last year’s U.S. sanctions efforts have also revealed the difficulty of controlling the flow and acquisition of civilian and dual-use components and products that may end up in military systems, giving the Russian military some breathing space as its global acquisition efforts evolve to match the endeavors of OFAC. As this report shows, there are still plenty of ways for the Russian Ministry of Defense to get what it needs, as the Kremlin takes advantage of the global economy, complex supply chains, and partner countries willing to work with Moscow.
Major supply shortages are forcing Russia to turn to less technologically advanced items, as well as Soviet-era defense stocks. As the Russian military starts fielding older systems modernized in recent months — and as it continues to use imported military technology — the quality of such military operations is coming into question, especially compared to Ukraine’s ongoing acquisition and fielding of Western-supplied weapons and systems. The pace and quality of Russian military operations will in fact depend on the Ukrainian military’s ability to field systems capable of countering Russian tactics. In other words, the Russian military can still field a modernized T-62 tank (first unveiled in the early 1960s) on the battlefield even if this vehicle lacks sophisticated countermeasures or optics. But the effectiveness of these systems will be significantly offset by Ukraine’s continued access to more advanced Western technology such as Javelin, Stugna, or NLAW anti-tank weapons or precision-guided artillery. Additionally, the Russian military can continue to launch Iranian-provided Shahed-136 combat drones at Ukrainian energy infrastructure without worrying that most are shot down, placing the onus on the Ukrainian defenders to expend valuable air-defense ammunition. This is the crux of this war in its second year: the Russian military can rely on its mass and continue feeding older or less than state-of-the-art technology as long as it thinks it can simply outlast the Western deliveries of weapons and systems to Ukraine.
3. Sanctions have made Moscow opt for a slower-paced attritional campaign.
Russia has lost a significant number of military vehicles, which could limit its capacity for large-scale ground offensives. This could be one reason why the Russian government, and President Putin in particular, are presenting this war as a long-term endeavor necessary to ensure Russia’s security. Ensuring a long-term struggle that slowly exhausts Ukrainian weapons stocks while outlasting Western aid efforts appears central to Russia’s strategy in Ukraine.
At the same time, turning this war into a slow-paced attritional campaign creates a little breathing space for the sanctioned Russian domestic defense industry to come up with the necessary solutions and workarounds outlined in this report. There is some evidence that the Russian government and military are exhausted and would prefer this conflict to enter the concluding stage, managed by the international community. In a statement on February 28, 2023, a Kremlin spokesperson indicated that peace negotiations with Kyiv are possible if Russia gets to keep the Ukrainian regions it currently controls: Donetsk, Luhansk, Kherson, and Zaporizhzhya, along with Crimea. But even if Kyiv were to agree to such negotiations, it remains unclear whether the Russian government would limit its ambitions to the regions it already occupies if Ukraine maintains its pro-Western political and military orientation.
Thus, as long as the Kremlin maintains its current outlook on Ukraine, the war is expected to continue, with Moscow preferring a slower-paced attritional campaign without significant breakthroughs or advances that could put further pressure on its military and industrial base already stretched thin by sanctions and the last 12 months of the invasion.
RECOMMENDATIONS
While it is not possible to completely control the flow of commercial parts that end up in the Russian military system, the authors of this report propose several ways for Western policymakers to close the loopholes actively used by the Russian government:
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Continue supplying Ukraine with higher-end military equipment at a pace that exceeds Russia’s production rate, which will make it harder for Russia to maintain an attritional war.
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Identify and target illicit networks, and particularly individuals involved in current sanctions-evasion efforts. In doing so, the United States should use its leverage in the post-Soviet region more proactively, including in Armenia, Georgia, and Kazakhstan.
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Restrict any existing transactions with Russian and Russia-linked defense companies and their affiliates. For example, Rostec subsidiaries and affiliated companies involved in civil aviation should be prevented from importing and sending sanctioned dual-use technologies to other Rostec affiliates involved in the production of different weapons systems.
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Eliminate the loopholes that allow some Western companies to import equipment into Russia by extending past contracts that preceded the imposition of sanctions.
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Work toward creating an OFAC equivalent at EU level. Currently, the monitoring of sanctions implementation and compliance lies within the member states, which may lead to disparities, as EU states have varied capacity in this regard. Such a structure will require strong local expertise to perform the necessary investigation.
Max Bergmann is the director of the Europe, Russia, and Eurasia Program and the Stuart Center in Euro-Atlantic and Northern European Studies at the Center for Strategic and International Studies (CSIS). Prior to joining CSIS, he was a senior fellow at the Center for American Progress, where he focused on Europe, Russia, and U.S. security cooperation.
Maria Snegovaya is a senior fellow for Russia and Eurasia with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS) and a postdoctoral fellow in Georgetown University’s Walsh School of Foreign Service.
Tina Dolbaia is a research associate with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS), where she examines and analyzes political, economic, and security developments in Russia and Eurasia.
Nick Fenton is a program coordinator and research assistant with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS), where he supports the program’s event management, outreach, and research agenda.