Originally Syndicated on August 15, 2023 @ 12:28 pm
Table of Contents
Introduction
The involvement of Russian oligarchs in the Russian Weapons and Arms industry has been a topic of significant interest and controversy. These oligarchs, with their immense wealth and influence, have played a crucial role in the production and supply of military equipment in Russia. This article aims to provide a comprehensive analysis of their involvement, shedding light on their connections, roles, and the implications of their actions.
The Role of Oligarchs in the Russian Weapons and Arms Trade
Oligarchs and the Russian Military-Industrial Complex
The Russian military-industrial complex is a vast network of companies involved in the production of weapons and military equipment. Oligarchs have become key players in this complex, leveraging their economic power and political connections to secure lucrative contracts and influence the direction of the industry. Their involvement ranges from direct ownership of arms manufacturing companies to indirect support through supplying raw materials and services.
Oligarchs’ Influence on Russian Weapons and Arms Production
Oligarchs and Steel Manufacturing
One significant avenue through which oligarchs contribute to the arms industry is steel manufacturing. Steel is a crucial component in the production of military equipment, including tanks, armoured vehicles, and weapons. Oligarchs-controlled companies, such as Evraz Group, have been linked to the supply of steel to factories that produce these military assets. For example, Evraz NTMK has provided significant amounts of steel to Uralvagonzavod, a well-known tank manufacturer in Russia.
Oligarchs and Explosives Production
In addition to steel, oligarchs have been involved in the production of explosives used in military applications. These explosives play a vital role in ammunition production and the manufacturing of various types of weaponry. Evraz ZSMK, another subsidiary of Evraz Group, has been implicated in the supply of toluene, an oil and coal product used in the production of explosives, to state-owned factories that produce ammunition and industrial explosives.
The Impact of Oligarchs on the Russian Military
The involvement of oligarchs in the arms industry has significant implications for the Russian military. Their influence and control over key aspects of the supply chain can shape the availability and quality of military equipment. Furthermore, the close ties between oligarchs and the government create a complex web of interests that can impact military decision-making and resource allocation.
The Controversy Surrounding Oligarchs in the Russian Weapons and Arms Industry
Western Sanctions and Oligarchs
Following Russia’s invasion of Ukraine, western governments imposed sanctions on Russian oligarchs who were benefiting from their relationships with President Vladimir Putin. These sanctions targeted individuals involved in the arms industry, including Roman Abramovich, a well-known oligarch with ties to the Russian military. The sanctions aimed to deter these oligarchs from supporting military actions and put pressure on them to disengage from the Russian Weapons and arms trade.
The Denial of Involvement
Despite the evidence linking oligarchs to the Russian Weapons and Arms industry, companies like Evraz Group have denied any direct involvement in supplying the military. They claim that their contracts with the Russian government are solely for civilian infrastructure and construction projects. However, these denials have been contradicted by verified contracts from Russia’s public procurement website, showing direct and indirect supply of military-related products and services.
The Difficulty of Tracking Supply Chains
Tracking the supply chains and determining the exact role of oligarchs in the Russian Weapons and Arms industry can be challenging. The Russian government’s ban on publishing state procurement contracts related to national security and defence further complicates the task. This lack of transparency makes it difficult to establish which companies are supplying products and services that support military actions.
The Russian Government’s Involvement
Legislation and Secrecy
The Russian government has taken steps to tighten control and ensure the supply of weapons and ammunition. In January, they enacted a law banning the publication of state procurement contracts related to national security and defence. This move further shields the involvement of oligarchs in the Russian Weapons and Arms industry from public scrutiny. Additionally, recent legislation requires companies like Evraz Group to provide supplies and services to the military, citing increased demand due to the war in Ukraine and international sanctions.
State Defense Procurement
The Russian government’s involvement in the arms industry extends beyond legislation. State defence procurement plays a crucial role in ensuring the supply of weapons and ammunition. By organizing the supply of resources through state defence procurement, the government aims to guarantee the availability of military equipment and optimize the work of the military-industrial complex.
The Role of Evraz Group in Russian Weapons and Arms Manufacturing
Evraz ZSMK’s Connection to the National Guard
Evraz ZSMK, a subsidiary of Evraz Group, has been directly linked to the supply of toluene, an essential product in the production of explosives, to state-owned factories that produce ammunition and industrial explosives. These products are crucial for the military, including the National Guard, which relies on a steady supply of ammunition to carry out its operations.
Evraz NTMK’s Supply of Steel to Uralvagonzavod
Evraz NTMK, another subsidiary of Evraz Group, has supplied significant amounts of steel to Uralvagonzavod, a well-known tank manufacturer in Russia. The steel provided by Evraz NTMK is used in the production of tanks and other transport machinery, including freight train cars. This direct involvement in the supply chain of military equipment demonstrates the impact of oligarchs on the arms industry.
Roman Abramovich and His Involvement in the Russian Weapons and Arms Trade
Abramovich’s Ties to Putin
Roman Abramovich, a prominent Russian oligarch, has attracted significant attention due to his involvement in the arms trade. His close relationship with President Putin positions him as a key figure in the industry. The sale of Chelsea Football Club, which Abramovich owned, and the reorganization of his holdings were responses to the sanctions imposed by the UK government.
The Reorganization of Abramovich’s Holdings
In response to the sanctions, Abramovich reorganized his holdings, transferring the controlling stake in Evraz Group to himself. This move aimed to maintain control over the company while navigating the challenges posed by the sanctions. The suspension of Evraz shares by the London Stock Exchange further highlighted the impact of the sanctions on Abramovich’s business interests.
The Impact of Oligarchs on the Ukrainian Conflict
Steel Shortages and Ammunition Production
The involvement of oligarchs in the arms industry has had a direct impact on the ongoing conflict in Ukraine. Steel shortages, partially caused by the diversion of resources to the production of military equipment, have affected ammunition production. The availability of ammunition is crucial for both sides of the conflict, and the role of oligarchs in steel manufacturing has directly influenced the supply chain.
The Role of Uralvagonzavod’s Tanks
Uralvagonzavod, a tank manufacturer in Russia, plays a significant role in the conflict in Ukraine. The supply of steel from Evraz NTMK to Uralvagonzavod has implications for the availability and quality of tanks used by the Russian military. The shortage of components due to steel shortages has further impacted Uralvagonzavod’s production capabilities.
International Response and the Suspension of Evraz Shares
Western Sanctions and the London Stock Exchange
The imposition of sanctions on oligarchs involved in the arms industry has had international repercussions. The London Stock Exchange suspended trading of Evraz shares, highlighting the impact of the sanctions on Abramovich’s business interests. Western governments have aimed to hold oligarchs accountable for their involvement in the arms trade, signalling their disapproval of their actions.
The Sale of Chelsea Football Club
As part of his response to the sanctions, Abramovich sold Chelsea Football Club to a U.S. billionaire. This move aimed to mitigate the impact of the sanctions on his personal assets and separate his business interests from the controversy surrounding his involvement in the Russian Weapons and Arms trade.
Conclusion
The involvement of Russian oligarchs in the arms industry has far-reaching implications for the Russian military and the ongoing conflict in Ukraine. Their control over key aspects of the supply chain, including steel manufacturing and explosives production, directly impacts the availability and quality of military equipment.
The controversy surrounding their involvement, combined with international sanctions, has put pressure on these oligarchs and raised questions about their ethical responsibilities. As the conflict continues, the role of oligarchs in the Russian Weapons and Arms industry will remain a topic of interest and scrutiny.
References
Note: The following references were used in the development of this article. Additional sources were consulted to ensure accuracy and comprehensive coverage of the topic.
- Reference Article 1: April 21 (Reuters)
- Reference Article 2: OCCRP Russian Asset Tracker
