Billionaire Putin Ally Dodges Ukraine Sanctions

A billionaire arms dealer is supplying missiles for Vladimir Putin's war against Ukraine amid "manifestly ineffective" sanctions from the U.S and its allies.

Vladimir Yevtushenkov, whose net worth stands at $1.7 billion, has been supplying lethal weapons to the Russian military "through a range of front companies", according to a new report that laid bare the shortcomings of the West's sanctions regime.

Experts have told Newsweek that weapons produced by sanctioned firms, such as Zala's Lancet-3 "kamikaze" drones, have wrought "significant" destruction of Nato-supplied equipment on the battlefield in Ukraine.

Yevtushenkov is the founder and former owner of defense contractor AFK Sistema. Both he and his firm were sanctioned in mid-2022 by U.S. allies for their links to the Russian Ministry of Defense following the country's invasion of Ukraine.

Newsweek has reached out to Yevtushenkov for comment.

However, the report released today by the Royal United Services Institute, a leading defence thinktank, warned that such measures have done little to stop Russian re-armament, and production of some equipment has actually increased in the wake of sanctions.

Since the full-scale invasion was launched in February 2022, Western powers have sought to limit Russia's ability to re-arm itself. Export controls, as well as sweeping sanctions against Russian individuals and companies, have all been implemented to handicap Putin's war machine.

While the sanctions were intended to halt AFK Sistema's production of "radar, long-range missiles complexes and UAVs," they say that Yevtushenkov continued to source key weapons components through front companies.

Using business links in Denmark, Germany, Switzerland, Ireland and Germany, "Sistema continued to function and to do significant volumes of business within Europe to sustain its work for the Russian MoD."

It wasn't until a year after Yevtushenkov himself was sanctioned, the report said, that European authorities took notice of Sistema's workaround and began to take action.

Jack Watling and Gary Somerville, the report's authors, criticised the West's "reactive, rather than proactive" attempts to disrupt Putin's procurement networks.

Their paper, entitled "A Methodology for Degrading the Arms of the Russian Federation," said the country has easily sourced the components needed for its arsenal and, in some cases, "increase the production of key platforms and systems throughout the war."

Zala Aero Group, a sanctioned Russian UAV manufacturer whose supply chains span North America, Europe and Asia, has continued to produce "kamikaze" drones that have been credited with destroying hundreds of Ukrainian weapons platforms, with Somerville and Watling describing them as "one of Russia's most effective loitering munitions."

"The impact that these have had on the battlefield is significant, particularly during Ukraine's summer 2023 counter-offensive and in the destruction of armored vehicles supplied by NATO," Somerville told Newsweek.

Through a clandestine supply chain process, Zala was able to source foreign microelectronics and other components necessary for manufacturing its drones, paying unsanctioned Russian middlemen to import the goods from Western countries.

"Sanctions following Russia's 2022 invasion of Ukraine do not appear to have hindered these companies' ability to import dual-use, export-controlled items which, in some cases, have seen an increase in imports since February 2022," the report said.

The report's authors have called on the U.S. and its allies to start "targeting the flows of specific items or technologies," rather than simply targeting the companies supplying arms to Putin.

However, they admit that effectively doing this would require addressing other issues which plague the Western sanctions framework, such as insufficient cross-country collaboration.

Reports have emerged of both Iranian and North Korean weapons being found on the battlefields in Ukraine, and China has been accused of providing Putin with satellite imagery to assist the Kremlin in its military efforts.

"It is virtually impossible for sanctions to 'de-arm' the country," Somerville told Newsweek.

"What they can do, when properly implemented, is slow-down production of weapons systems, increase the costs for the procurement of foreign components and force Russia to procure analogous components from other manufacturers," he said.

Being forced to obtain poorer quality components from China or Iran, as opposed to South Korea or Europe can "degrade the overall effectiveness of the Russian Army and its ability to wage war against Ukraine," he said.

Russia remains heavily dependent on other nations, including NATO states, for access to raw materials and components for its weaponry.

This is particularly the case for advanced military systems, according to Somerville, who told Newsweek that cruise and ballistic missiles, loitering munitions, and electronic warfare platforms remain highly dependent on components such as microelectronics which are manufactured abroad.

This means that the West could in theory cut off the supplies making their way into Russia from Europe, and more effectively stymie the Russia war machine.

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