May 9: In Europe, discovered a network of FSB for the purchase of goods bypassing sanctions

As published in the Moscow Times, May 3, 2023

In Europe, discovered a network of FSB for the purchase of goods bypassing sanctions

The Moscow Times, May 3, 2023

During the Cold War, the technologically lagging USSR secretly acquired modern products from the West in order to use them, among other things, for the production of weapons. History repeats itself.

Firms that worked for Russian intelligence services bought components and equipment from Europe, from microchips to ammunition, despite sanctions imposed by Western countries, both before and after the start of the war in Ukraine, according to the Financial Times . These firms were connected, the US Department of Justice called them the "Sernia Network" - after the name of the Moscow company "Sernia Engineering" (specializes in the development of solutions and the supply of high-tech equipment for measurements and research in the field of microelectronics, according to its website).

Sernia Engineering is acting on instructions from Russian intelligence services, including the scientific and technical service of the FSB, and purchases advanced electronics and instrumentation for the Russian military-industrial complex and the research and development sector, according to an indictment filed in December by the Ministry of Justice against five Russians associated with the network . Among them was alleged FSB Colonel Vadim Konoshchenko, who was detained at the Estonian border late last year while trying to smuggle 35 types of semiconductors and a large number of sniper rifle bullets into Russia.

Among the "clients" of the network are also named the Foreign Intelligence Service, the state corporation Rostec, the Ministry of Defense and Rosatom.

As the FT found out, TradeTools Trading House continues to purchase prohibited equipment in the EU countries. It is registered at the same address as Robin Trade, a member of the Sernia network. Both companies are owned by Alexey Zibyrov. One Western official, having read the results of the FT investigation, confirmed that although the US did not impose sanctions against Zibyrov, the Americans have him "in operational development" due to alleged links with the FSB.

Corporate and customs documents seen by the FT show that after the start of the war in Ukraine, TradeTools purchased $900,000 worth of products prohibited from deliveries to Russia. In particular, by the end of 2022, it imported 22 tons of equipment from Germany with a declared value of $554 000. It also purchased from a small Singaporean firm integrated circuits manufactured by American companies such as Analog Devices, Texas Instruments and Altera, as well as the German IC-Haus. All these companies, following the sanctions, stopped deliveries to Russia.

In addition, TradeTools purchased products from Finland that are on the UK Export Control List (although they are not on the EU list).

TradeTools, in a sense, took over from Robin Trade, which, according to customs data, supplied goods worth $12.2 million to Russia by April 2022, but after the imposition of sanctions, its revenue fell by 90%.

However, even before the war, in 2019, Tradetools purchased products from two British companies controlled by Russians, Majory LLP and Photon Pro LLP. Both of these firms were sanctioned by the United States in 2022, which called them front companies of the FSB and accused them and their leaders of importing technologies prohibited by sanctions into Russia.

Western and independent Russian media, as well as Western law enforcement agencies, have already uncovered several schemes for the supply of banned technological products to Russia. Artyom Uss, the son of the governor of the Krasnoyarsk Territory, Alexander Uss, participated in one of them (Artem was arrested in Italy, but managed to escape when the court approved his extradition to the United States). In another, The Wall Street Journal found, Chinese companies supplied sanctioned Russian businesses with navigation equipment, radar and jamming technology, fighter jet parts and microchips. And Turkish companies sold equipment, electronics, spare parts and other goods (including US sanctions) that the Russian armed forces (AF) need.

“It’s a competition over whose will is stronger,” James Byrne, technology and security expert at the Royal Joint Institute for Defense Studies, told Bloomberg about Russia’s attempts to circumvent sanctions and the West’s struggle with loopholes: “The Russians need [technology], they are critical to their military program , so they need to get them. Glad they will go to great lengths."