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1. Shipment of a Controlled Vacuum Furnace to North Korea via Multiple States: An HS Code Case Study

Author:
David Albright
Publication Date:
01-2025
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
In tracking trade data and trade flows, Harmonized System (HS) codes are routinely used to aid searches for dual-use commodities and to help guide the identification of dual-use items that require a license or greater scrutiny. A recurring concern is shipper falsification of HS codes to evade detection or payment of duties. An illustration of such falsifications is a case we learned about via government sources from around 2022 that involved North Korea and a dual-use vacuum furnace suitable for uranium melting that wound its way from Spain to North Korea, via Mexico, South Africa, and China. Such a furnace is typically controlled under the Nuclear Supplier Group (NSG) Part 2 list and is banned for export to North Korea under United Security Council resolutions. This type of furnace is a mainstay of a nuclear weapons program, particularly one that uses weapon-grade uranium as the nuclear explosive material, as North Korea is known to do. With North Korea expanding its uranium enrichment program and producing greater quantities of weapon-grade uranium, this new furnace would be especially important.
Topic:
Nuclear Weapons, Trade, and Dual Use Items
Political Geography:
Asia and North Korea

2. New Information on Shenyang Machine Tool Company’s Illicit Sales to North Korea and Russia

Author:
David Albright and Spencer Faragasso
Publication Date:
01-2025
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Several years ago, the Institute reported about the relatively large, multinational Chinese company Shenyang Machine Tools Company supplying sophisticated computer numerically controlled (CNC) machine tools, equipped with Western controlled software, to North Korea in violation of UN Security Council (UNSC) sanctions and a supplier country’s trade control laws that banned re-export of this software. New information details the disingenuous way in which the Chinese government investigated this case, indicating nonetheless inadvertently that North Korea received these machine tools, while also demonstrating China’s utter disregard for enforcing UNSC sanctions or its own or others’ export control laws. This case serves as another of the many cases highlighting China as a long-time irresponsible trading partner that responsible companies should avoid when sensitive dual-use goods are involved, lest they be complicit in outfitting North Korea’s, Iran’s, or Russia’s military programs. Today, responsible suppliers are inadvertently facilitating Russia’s prosecution of an illegal war against Ukraine. Given Shenyang Machine Tools Company’s recent exports of goods to Russia with Harmonized Shipments (HS) codes found on the Bureau of Industry and Security (BIS) Common High Priority List (CHPL), this company should be considered for sanctions.
Topic:
Sanctions, Trade, Illegal Trade, and Shenyang Machine Tool Company
Political Geography:
Russia, China, Europe, Asia, and North Korea

3. Going Nuclear on Rosatom: Ending Global Dependence on Putin’s Nuclear Energy Sector

Author:
David Albright
Publication Date:
03-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Rosatom, its entities, and its senior personnel should be subjected to far greater sanctions by the United States and its allies. Sanction carveouts or waivers can be granted for nuclear reactor safety considerations, operating nuclear reactors, and for other Rosatom customers as they wind down existing contracts. However, the status quo is not sustainable. It leaves the United States and its allies vulnerable to political and economic pressure by Rosatom and its owner Russia, with the constant threat that this Putin-controlled entity could cut off energy supplies. This already happened to Germany in September 2022 when Gazprom, another Putin-controlled entity, cut off natural gas supplies to Germany as a result of a clash over Putin’s invasion of Ukraine. Only a mild winter staved off serious and needless suffering by the German people. Rosatom deserves sanctions today. It is not just a benign commercial nuclear energy supplier. Rosatom has actively participated in the illegal seizure of the Zaporizhzhia nuclear power plant (ZNPP), a seizure causing an increased risk of a major nuclear accident. Rosatom officials are not authorized to operate these reactors. IAEA Director General Raphael Grossi has called this situation “not sustainable” and “risks nuclear safety and security.” Rosatom is also complicit in the human rights violations of Ukrainian plant personnel, violations that include torture. Rosatom also actively contributes importantly to the production of Russian weapon systems used against Ukraine. A case in point is the participation of one of its subsidiaries in the production of the Shahed 136 kamikaze drone that Russia has used to destroy much of Ukraine’s civilian energy infrastructure and terrorize its civilian population.
Topic:
Sanctions, Nuclear Energy, Energy, and Russia-Ukraine War
Political Geography:
Russia and Eurasia

4. Alabuga’s Greatly Expanded Production Rate of Shahed 136 Drones

Author:
David Albright, Igor Anokhin, Sarah Burkhard, Victoria Cheng, and Spencer Faragasso
Publication Date:
05-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Over the last two years, Russia has launched thousands of Shahed 136 drones against Ukraine. Although most of these relatively noisy, slow-moving drones have been shot down, about 15 percent on average have gotten through, causing immense damage to Ukraine’s military and civilian infrastructure. The Russian manufacturer of these drones, JSC Alabuga, contracted with Iran in early 2023 in a $1.75 billion dollar franchise deal to supply 6000 of the drones to the Russian Army by September 2025 in a three-stage arrangement, shown in Figure 1. While there were initial delays and skepticism about Alabuga being able to supply 6000 drones, data on Russian launches of Shahed drones collected by the Ukrainian military indicate that Alabuga is ahead in its production schedule and has already supplied approximately 4500 of the promised 6000 drones as of late April 2024. Based on these data, Alabuga has almost tripled its average production rate recently. It has, for the last several months produced Shahed drones at an average rate of about 20 drones per workday, equivalent to two shifts per day at the production facility, compared to a contract amount for 2023 of about 7 drones per workday followed by 10 drones per day. At this new rate, about 5200 drones per year, Alabuga could fulfill its commitment of supplying 6000 drones a year early, by mid-August 2024, and it could supply an additional 5400 drones by September 2025.
Topic:
Weapons, Drones, Production, and Russia-Ukraine War
Political Geography:
Russia, Europe, Iran, and Ukraine

5. Action from Semiconductor Companies is Long Overdue

Author:
David Albright and Spencer Faragasso
Publication Date:
09-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
The United States and its allies have struggled to stop the supply of controlled microelectronics to Russia, which then uses them in a variety of drones, missiles, and other weapon systems in its brutal war against Ukraine. While the United States and its allies can do more, it is time to turn far greater attention to the Western companies making these goods and demand far more from them. A recent companion study of trade data charting exports from China to Russia in a twenty-month period up to the end of 2023, conducted by one of us, showed that exports of the most critical microelectronics, electronic integrated circuits, amounted to $1.5 billion, steadily increasing throughout 2023, despite Western restrictions and pressure on China, which remains uncooperative, even hostile. 1 Electronic integrated circuits take on special significance, because Russia cannot make them, and there are limited manufacturers in the world, almost all in the United States and Europe. In a four-tier U.S. priority listing of banned electronic and other components and the means to make them, Tier 1 is exclusively composed of electronic integrated circuits. Aided importantly by China, Russia is countering the sanctions imposed by the United States and its allies. Without more countermeasures and enforcement, it would be unsurprising to find Russia continuing to acquire large quantities of restricted Western microelectronics needed for its war production.
Topic:
Sanctions, Weapons, Trade, Semiconductors, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and United States of America

6. Russian Company Drake LLC’s Procurements for JSC Alabuga’s Military Drone Projects - JSC Alabuga’s Weaponization of Commercial Drones for Military Use in Ukraine

Author:
David Albright and Spencer Faragasso
Publication Date:
07-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
With the onset of Russia’s invasion of Ukraine, JSC Alabuga shifted from centering on hosting domestic and international civilian manufacturing facilities at its Special Economic Zone (SEZ) to direct military production of military drones, in particular the Shahed 136 kamikaze drone under a supply and franchise contract with Iran. This shift has necessitated the large-scale procurement of a variety of different types of goods abroad. One of JSC Alabuga’s important procurement arms has been Drake LLC, aka Dreik LLC, which contracts with Alabuga Development Company, JSC Alabuga’s main construction and production arm. Drake’s role in outfitting military industries was recognized on February 23, 2024, when it was sanctioned by the United States. However, its precise dealings which warranted this designation have received little public scrutiny. The case of Drake exposes a part of Alabuga’s drone production supply chain and its broader interest in military drones in addition to the Shahed 136 drone. This case study reveals how Alabuga Development Company purchased in early 2023 via Drake and a third party in Kazakhstan, DRONE.kz, up to 30 Dragonfish drones from Autel Robotics, a major Chinese drone manufacturer with a strong U.S. presence, for modification at Alabuga for military use in Ukraine. The planned changes included extending the drone’s range, strengthening its ability to defeat jamming from enemy electronic warfare systems, and/or attaching a universal delivery system for a variety of ordnance, such as grenades and video-guided rocket propelled grenades.
Topic:
Weapons, Drones, Manufacturing, Procurement, Russia-Ukraine War, and Dual Use Items
Political Geography:
Russia, Europe, and Ukraine

7. Russian Company Elmak Procures “High Priority” Items for Russia’s War Efforts via China

Author:
David Albright and Spencer Faragasso
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Russian weapons, including bombs, missiles, and drones, depend on crucial electronic components, such as field programmable gate arrays (FPGA) and microcontrollers, many of which cannot be made by Russia. In many cases, produced only by Western companies, these essential components are being sourced by Russian electronics importers and trading companies in large quantities from, foremost, China. The Russian trading company Elmak LLC, aka Kometa LLC, has imported over $5 million of Western electronic goods, almost entirely via China. Over 90 percent of the items fall under Tier 1 of the Bureau of Industry and Security and European Union List of Common High Priority Items banned for export to Russia and at heightened risk of being diverted to Russia illegally due to “their importance to Russia’s war efforts.” China’s lack of action to prevent these sales justifies NATO’s recent labeling China as a “decisive enabler of Russia’s war against Ukraine,” 1 adding weight to calls for the application of more sanctions against Chinese suppliers and enabling banks. But U.S. and other Western companies need to do more. They should not ship to China any electronics known to be used in weapons against Ukraine. U.S. companies should show greater due diligence on the final use and end users of their products and simplify supply chains to prevent unauthorized transfers of electronics with restricted Harmonized System (HS) codes. At the very least, companies should agree not to export the most important electronic items to China, which have been identified in Russian weapons downed in Ukraine. Otherwise, as the war continues, with more U.S and other Western manufacturers’ electronics found in Russian weapons in Ukraine after causing casualties and destruction, these manufacturers look increasingly insensitive and powerless against their own complicity in supporting Russia’s illegal war.
Topic:
Sanctions, Weapons, Trade, Imports, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, and Ukraine

8. Iran/Russia Military Technology Axis: Russia Showcases to Iran New and Advanced Military Technology

Author:
David Albright and Spencer Faragasso
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
A dangerous new weapons technology partnership between Iran and Russia is emerging with deadly consequences for the United States, Israel, and their allies. This axis, helped importantly by China, exchanges finished military hardware and the technology to replicate and produce it. With the advent of Russia’s invasion of Ukraine, the transfer of weapons technology from Iran to Russia has developed on a large scale. The Ukraine war has led Russia to seek goods from Iran, including prominently a $1.75 billion purchase of Shahed 136 kamikaze drones and their production know-how. As it produces the Shahed drones, known in Russia as the Geran 2 drone, Russia has improved it. Based on the extensive interactions in Iran and in Russia between Iranian experts and the drone manufacturer, JSC Alabuga, there are grounds to believe that Russian improvements in the drone’s design and production have filtered back to Iran. Additionally, Iran is interested more generally in Russian military technologies.
Topic:
Weapons, Drones, Trade, Russia-Ukraine War, and Military Technology
Political Geography:
Russia, Europe, Iran, and Middle East

9. A Strategic Challenge: A Peddling Peril Index Analysis of Countries’ Restricted Russia Trade

Author:
David Albright, Sarah Burkhard, and Spencer Faragasso
Publication Date:
07-2023
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
National trade control systems and sanctions enforcement across the globe have been particularly challenged by Russia’s 2022 invasion of Ukraine, the unexpected types and number of goods to control, the need for rapid control of those items, and Russia’s determination to thwart others’ trade controls. The Russian situation demonstrates that even countries with strong strategic trade control systems have vulnerabilities. • In the aftermath of Russia’s invasion of Ukraine, the results of the Peddling Peril Index (PPI) for 2021/2022 provide a method to assess a total of 31 countries identified by their respective roles in the transshipment of restricted goods or the supply of dual-use goods used by the Russian military. • The purpose of this study is to identify patterns in these countries’ scores and lessons in finding ways of thwarting Russia’s success in violating sanctions and export controls.
Topic:
Sanctions, Exports, Trade, and Russia-Ukraine War
Political Geography:
Russia and Europe

10. Visible Progress at Russia’s Shahed Drone Production Site: Satellite Imagery Update and Call for Action

Author:
David Albright and Sarah Burkhard
Publication Date:
11-2023
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
Nearly three months after the Institute and The Washington Post publicly revealed detailed information on the plans of JSC Alabuga1 (“Alabuga”) to produce thousands of deadly Shahed136 kamikaze drones on Russian soil, satellite imagery indicates that plans are progressing at the Alabuga Special Economic Zone. Yet, the company responsible, JSC Alabuga, and related companies are still not found on public U.S. or allied sanctions lists. The information in internal documents, analyzed by Institute staff over hundreds of hours, reveals not only detailed timelines for Alabuga’s production of weaponized drones and the establishment of mass production with Iranian assistance, but also multiple pressure points and vulnerabilities. Now, not later, is the time for the U.S. government to take the lead, work with partner governments and industry, and use leverage against those less inclined to cooperate, to hinder Alabuga from succeeding in providing the Russian military with thousands of Shahed-136 drones. With winter fast approaching, and Alabuga’s Shahed output increasing, Russia can be expected to accelerate its Shahed-136 attacks against Ukraine’s vital energy infrastructure, causing brutal living conditions for the civilian population. A key, overdue first step is for the United States and its allies to sanction JSC Alabuga and its associated companies
Topic:
Weapons, Drones, and Russia-Ukraine War
Political Geography:
Russia and Eurasia