Large-scale scheme to supply Russian defence industry uncovered in Germany

Law enforcement authorities in Germany have dismantled a large-scale smuggling network that has been supplying European dual-use technology to Russia's military-industrial complex in circumvention of Western sanctions.

Source: Politico, a Brussels-based politics and policy news organisation

Details: An investigation has revealed that Global Trade, a German trading company based in the city of Lübeck, was at the centre of the smuggling scheme. The firm has been run by a 39-year-old businessman known as Nikita S. since the beginning of Russia's full-scale invasion of Ukraine.

In reality, the company was controlled by Kolovrat, a Russian firm subject to sanctions which services Russia's military-industrial complex. Russian handlers had direct access to the German company's email system. They ordered goods across Europe under false identities, pretending to operate a legitimate business from Germany.

As direct exports to Russia became difficult due to Western sanctions, the criminal network began routing shipments through third countries, most often via Türkiye. Investigators said the time between export from the EU and import into Russia had often been only five to ten days.

Customs records and intelligence reports contained in the case file show that Russian buyers were purchasing microcontrollers, electronic components, sensors, converters, ball bearings, mechanical parts, oscilloscopes and other measurement equipment on a massive scale. Investigators traced these dual-use goods directly to Russian defence companies. In particular, equipment was supplied to the All-Russian Scientific Research Institute of Automation, which is linked to nuclear weapons development.

Internal correspondence mentioned in the case materials shows that deception had become routine. In one message, Nikita S. reminded a partner: "Make it look clean. No Russian reference anywhere." In another: "Remove all documents from the boxes before shipment."

Investigators noted that the system had relied on a wider circle of participants: logistics staff handling shipments and documentation, accountants processing payments and preparing invoices and sales managers sourcing suppliers across Europe. Some worked from Germany, others from Russia. Investigators believe several individuals were fully aware of where the goods were going. One message stated explicitly: "The goods are needed in a sanctioned country."

In total, around 16,000 shipments passed through the network, worth more than €30 million. The scheme was uncovered by Germany's Federal Intelligence Service (BND). German intelligence officers were able to infiltrate the internal network of the Russian company Kolovrat and track transactions from within.

Nikita S. and several associates were arrested after prolonged surveillance. They are accused of systematic violations of export controls and large-scale sanctions evasion. Under German law, the suspects face up to 10 years in prison.

Documents indicate that this was not an isolated scheme but part of a broader system designed to ensure a continuous flow of critical technologies to Russia despite Western sanctions. In one BND assessment, another Russian company, Rokem Services, attempted to obtain sanctioned equipment from a German firm via intermediaries, including Global Trade, a Turkish state-owned entity, and Kolovrat.

"The equipment is presumed to be accessories for seawater desalination plants, which can also be utilised for military purposes, particularly in nuclear-powered submarines," a BND investigator noted.

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