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A German businessman has been detained for allegedly providing electrical components to Russia that were used to make Orlan-10 drones deployed in the war in Ukraine, in a case that highlights the problem of sanctions evasion by western technology firms.
Waldemar W, a German citizen of Russian origin, was remanded in custody after federal prosecutors obtained an arrest warrant in an investigation where he is suspected of violating Germany’s law on foreign trade, said the country’s attorney-general on Tuesday.
The case underscores the mounting scrutiny that western exports of high-tech goods to Russian firms have been subjected to since the start of Russia’s full-scale invasion of Ukraine in February 2022. Investigators are increasingly focusing on the use of third countries to get around export bans aimed at starving Vladimir Putin’s military of the products it needs to sustain its war against Ukraine.
Prosecutors said Waldemar W — German authorities never divulge the surname of suspects in criminal cases — ran two companies in the western state of Saarland that deal in electronic components.
They said that in 26 instances between January 2020 and March 2023, he exported such components to a company in Russia that produced military gear and materiel, including the Orlan-10 drones currently being deployed by Russia in Ukraine.
They said the components he sold, with a total value of about €715,000, were an integral part of the Orlans and are on the EU’s list of sanctioned goods.
A study by the Royal United Services Institute from late last year called the Orlan-10 Russia’s “most successful UAV (unmanned aerial vehicle)”, describing it as a “platform that sits at the heart of the country’s warfighting capabilities”. It said it enabled the Russian army to “rain accurate fire down on Ukrainian formations”.
Rusi said Russian companies closely associated with the St Petersburg-based Special Technology Centre, the Russian manufacturer of the Orlan-10, had “drastically increased imports of critical Western-manufactured components” since Russia’s invasion of Ukraine began.
The German prosecutors’ statement said Waldemar W evaded EU sanctions by importing the goods from abroad and then exporting them to Russia through a company he controlled in the southern German state of Baden-Württemberg.
The components were sent to two dummy civilian companies registered in Russia, which then passed them on to an arms manufacturer, in close consultation with the accused.
Prosecutors said that after the start of the Ukraine war, the accused started to send the goods to Russia with the help of sham beneficiary companies in third countries such as Dubai and Lithuania.
The US and EU have also pushed countries like the UAE to halt exports of critical goods to Russia, amid fears they were becoming hubs for the shipment of items that could be repurposed to help Russia’s war effort.
In June the EU adopted a new sanctions package against Russia that was in part aimed at clamping down on widespread sanctions evasion through third countries.
The new anti-circumvention framework allowed the EU to prohibit exports of sensitive dual-use and high-tech goods and technology to third countries that had been identified as having persistently failed to prevent supplies of such goods from the EU to Russia.
